Mortgage Crisis: What non-financial assistance have states provided?
States have responded to the foreclosure crisis in a variety of ways, including creating public awareness campaigns, operating hotlines, and providing consumer counseling. Twenty-three states have in place outreach programs, such as workshops, hotlines, and public awareness campaigns. Forty-one states provide troubled borrowers with foreclosure prevention counseling, funded by the state or through the federal National Foreclosure Mitigation Counseling Program.
See detailed table of state nonfinancial assistance programs
- Ten states1 participate in Freddie Mac’s "Don’t Borrow Trouble" campaign, which educates borrowers about predatory lending through consumer outreach and counseling. Eighteen states2 use other forms of outreach. For example, in November 2007, California launched its "90 Days of Hope" program, a $1.2 million public awareness campaign to tell homeowners what they might do to avoid foreclosure.
- Eight states3 operate hotlines that connect troubled borrowers with information or counseling. Colorado, for example, launched a hotline in October 2006 to connect troubled homeowners with housing counselors who can provide information and help them work with their lenders to avoid foreclosure.
- Thirty-nine states4 use funds from the National Foreclosure Mitigation Counseling Program to finance state and local counseling programs intended to prevent foreclosures. NeighborWorks America administers the $475 million initiative, which Congress created in December 2007 to address the mortgage crisis. In most states, the state housing finance agency distributes funds to local organizations to expand their foreclosure prevention counseling programs. Some states, including Colorado, Idaho, Michigan, and Minnesota, use the funds to support existing state counseling programs. New York and Oregon matched their federal grants with state funds and distributed the sum to local organizations.
- Twenty-five states5 finance or administer their own foreclosure prevention counseling programs. For example, Illinois established a Statewide Foreclosure Prevention Network in February 2008 to provide free counseling and mitigation assistance for homeowners facing increasing mortgage payments or foreclosure.