HUD Bolsters Foreclosure Prevention in Detroit Area, Announces Joint Venture
Monday, July 28, 2008
by Michael Peron
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The Department of Housing and Urban Development (HUD) is exploring new options to help stave off the nation's growing foreclosure problem. The agency's pilot foreclosure prevention initiative, which was announced by the new HUD secretary yesterday, will be providing assistance to homeowners, starting with the Detroit area.
According to the latest stats released today by RealtyTrac, Detroit ranked No. 13 amongst the top 20 metro areas with the highest foreclosure rate.
By creating a means for lenders and servicers to assign their nonperforming FHA-insured mortgages to HUD and through a joint venture partner, the government agency will also help stem the increase in vacant properties city-wide.
“The primary objective of this partnership is to keep as many Michigan families as possible in their homes,” said HUD Secretary Steve Preston. “It will not only help individual homeowners, it will decide the flow of vacant properties weighing down property values and creating blight in neighborhoods.”
While Preston was in town, he visited GreenPath, a nationwide counseling credit service, where he listened to the nonprofit's frontline counselors, mortgage industry representatives, and GreenPath's counseling clients. The main premise of their meeting: the stringent need for housing counseling during the early contact period when a borrower might be facing foreclosure, as well as the need to educate home buyers before they commit to a mortgage product.
“With every call, I am struck that it is a shame we are talking to people about budgeting, money management, and better mortgage options when their housing payment is already delinquent,” said Veronica Smith, a counselor with GreenPath since 2004. “If we could share all of this information with them before they buys, they'd have what they need to avoid foreclosure proceedings—and so much of their pain and stress.”
Preston's Detroit announcement comes on the heels of a Tuesday conference call, where HUD announced the expansion of it's FHASecure mortgage refinance program. Jacqueline Gilbert
According to the latest stats released today by RealtyTrac, Detroit ranked No. 13 amongst the top 20 metro areas with the highest foreclosure rate.
By creating a means for lenders and servicers to assign their nonperforming FHA-insured mortgages to HUD and through a joint venture partner, the government agency will also help stem the increase in vacant properties city-wide.
“The primary objective of this partnership is to keep as many Michigan families as possible in their homes,” said HUD Secretary Steve Preston. “It will not only help individual homeowners, it will decide the flow of vacant properties weighing down property values and creating blight in neighborhoods.”
While Preston was in town, he visited GreenPath, a nationwide counseling credit service, where he listened to the nonprofit's frontline counselors, mortgage industry representatives, and GreenPath's counseling clients. The main premise of their meeting: the stringent need for housing counseling during the early contact period when a borrower might be facing foreclosure, as well as the need to educate home buyers before they commit to a mortgage product.
“With every call, I am struck that it is a shame we are talking to people about budgeting, money management, and better mortgage options when their housing payment is already delinquent,” said Veronica Smith, a counselor with GreenPath since 2004. “If we could share all of this information with them before they buys, they'd have what they need to avoid foreclosure proceedings—and so much of their pain and stress.”
Preston's Detroit announcement comes on the heels of a Tuesday conference call, where HUD announced the expansion of it's FHASecure mortgage refinance program. Jacqueline Gilbert
