UNEMPLOYMENT AND BUREAUCRACY BLOCK HOME RESCUE EFFORTS




April 14 2010

 

 

 

FOR IMMEDIATE RELEASE
Apr 14, 2010

Contact:
Elena Gaona
(202) 785-1670

UNEMPLOYMENT AND BUREAUCRACY BLOCK HOME RESCUE EFFORTS

Washington, DC—A survey of foreclosure prevention counselors released today by NCLR (National Council of La Raza), the largest national Latino civil rights and advocacy organization in the United States, reveals that slow-moving mortgage servicers responsible for processing mortgage payments and stubborn unemployment rates are major barriers to stemming the tide of preventable foreclosures.

Counselors from nearly 250 nonprofit organizations from 45 states responded to a survey about their experiences working with the Making Home Affordable (MHA) loan modification program, helping families purchase a home, and managing the impact of the recession on their agencies. Among the findings in the survey:

Approximately five out of six counselors rated mortgage servicers’ foreclosure prevention track record as fair or poor.
Counselors reported that servicers frequently lose clients’ documents, neglect to respond in a timely manner, and send families to foreclosure while their applications are still being reviewed.
Unemployment and loss of income were driving causes of the mortgage delinquency cases handled by survey participants. Furthermore, after a loss of income, those most in need of foreclosure intervention are unable to afford home rescue services.
More than one-quarter of the counseling agencies revealed that unemployment or job loss had also affected their staff or the spouse of a staff member, causing their families to fall behind on their mortgages.
“We are disappointed that after two years of the foreclosure crisis and one year of the Making Home Affordable program families are still not getting the help they need,” said Janet Murguía, NCLR President and CEO. “Community-based organizations are on the front lines of the fight to save our neighborhoods from the devastating impact of record-high foreclosure and unemployment. They deserve to have the tools they need to stabilize the local housing and job markets.”

It is unclear whether recently announced revisions to the MHA program will address the issues raised by housing counselors. While the changes―including help for homeowners who owe more than their house is worth―are encouraging, they do not address the challenges created by servicer bureaucracies whose missteps can needlessly land a borrower in foreclosure. In addition, with bouts of unemployment often lasting longer than six months, especially among workers of color, the three months of home loan assistance allotted by the MHA program is not likely to help the majority of unemployed Latino and Black homeowners.

The NCLR Homeownership Network (NHN), a U.S. Department of Housing and Urban Development (HUD)-certified housing counseling intermediary, partnered with 11 other HUD-approved housing counseling intermediaries to develop and administer this survey. The NHN provided housing counseling services to more than 52,000 families last year.

For more information, please visit www.nclr.org | www.facebook.com/nationalcounciloflaraza | www.myspace.com/nclr2008 | http://twitter.com/nclr.

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Issues: Housing
Geography: