Keeping Our Homes

I decided to post a link to Fed Chairman Ben Bernanke’s comments to the House Financial Services Committee on suprime mortgage lending.

When my children were younger, we faced this crisis. I had submitted to my ex-husband's insistence on a house I knew we could not afford.

I take the responsibility for that choice, though I was young and stupid.

Luckily we were able to save our home but that is due to the economic savvy of my late mother-in-law.

Were it not for her, we could have been homeless.

I was fortunate to have such a smart mother in law and I and my children are fortunate for her loving helping hand.

There aren't many mother-in-laws like mine though so for those who need a helping hand, maybe there's something in here for people facing foreclosure during the current sub-prime mortgage crisis.

"...many homeowners who took out mortgages in recent years are in financial distress. To help those borrowers, the Federal Reserve, together with the other federal supervisory agencies, has issued two statements–in April, to mortgage lenders; and earlier this month, to mortgage servicers–to encourage the financial industry to work with borrowers to arrange prudent loan modifications to avoid unnecessary foreclosures. The Conference of State Bank Supervisors (CSBS) joined the federal agencies in the second statement. Often, loan workouts are in the interest of all parties. We have also encouraged lenders and servicers to identify and contact borrowers who, with counseling and possible loan modifications, may be able to avoid entering delinquency or foreclosure. The simple step of reaching out to borrowers before they get into trouble can be very productive. In addition, a member of the Federal Reserve Board serves as a director of NeighborWorks America, which encourages borrowers facing payment difficulties to seek help by contacting their lenders, services, or trusted counselors. Recently, NeighborWorks America launched a nationwide advertising campaign to increase awareness of available support from their 24-hour hotline, and they are now responding to 2,000 calls a day, almost double the number in June.

Additionally, the Federal Reserve is working closely with community and industry groups around the country to reduce homeowners’ risks of foreclosure. The community affairs offices in each of the Reserve Banks provide significant leadership and technical assistance. For instance, a public-private collaboration initiated by the Federal Reserve Bank of Chicago with Neighborhood Housing Services of Chicago and the City of Chicago produced the Home Ownership Preservation Initiative (HOPI), which began in 2003. In the ensuing three years, the HOPI program counseled more than 4,000 people, prevented 1,300 foreclosures, and reclaimed 300 buildings.2 HOPI has also been a model for foreclosure prevention programs now operating around the country, including in Baltimore and Atlanta and in Ohio. As another example, the community affairs office of the Federal Reserve Bank of San Francisco recently convened a series of workshops to develop community-based solutions to mortgage delinquencies in six cities. More than 700 lenders, housing counselors, community group representatives, and government officials attended.