State Program Helps Avoid Foreclosures

foreclosure avoidanceEven with foreclosure rates increasing 14% in 2009, North Carolina still ranks one of the lowest for foreclosures nationwide.   With help from a government run program that focuses on counseling and legal-service agencies, the state was able to avoid $183.6 million in investor losses and $43.6 in value declines last year.

The State Home Foreclosure Prevention Act (SHFPP) is the result of  2008 emergency legislation to the state’s high rate of foreclosures on subprime loans and successfully dodged 2,620 foreclosures in 2009.  The project was launched with the Commissioner of Banks, 34 state agencies, HUD-certified counseling services, legal service providers, and nonprofit groups.  Lenders have to give 45 days notice before filing foreclosure, according to state law. Counselors review homeowner’s personal finances to figure out why the mortgage became unsuccessful and might be able to work out a loan modification and the Commissioner of Banks expanded the phone-counseling services to all North Carolina homeowners seeking help.

SHFPP emerged when the state passed its Emergency Foreclosure Act in 2008 and sent $600,000 in grants to nonprofits and counseling agencies.  Bank of America put up another $2 million, and North Carolina Housing Finance Agency secured $25 million in federal grants and the Commissioner of Banks pays the SHFPP staff with more than $1 million in fees it charges banks.  If these funds aren’t renewed, the project will need to tap other sources, such as national foundations.  However, with the expected budget deficit there is a chance the funding won’t be renewed.  Read the entire article.

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