User:Richc80/Hope Now Alliance

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The Hope Now Alliance is a cooperative effort between the US government, counselors, investors, and lenders to help homeowners who may not be able to pay their mortgages. Created in 2007[1] in response to the subprime mortgage crisis, the alliance claims to have helped over 1 million homeowners avoid foreclosure through January 2008. Critics of the alliance contend that the assistance provided does not go far enough,[2] and that not enough homeowners are being helped.[3]

Contents

[edit] Creation

On August 31, 2007 President George W. Bush asked Housing and Urban Development Secretary Alphonso Jackson and Treasury Secretary Henry Paulson to work with mortgage lenders, foreclosure counsellors, the Federal Housing Administration, Fannie Mae and Freddie Mac to launch a new "foreclosure avoidance initiative".[4] These discussions led to the creation of the Hope Now alliance, which was announced by Secretary Paulson on October 10, 2007.[5]

At its inception the Alliance was comprised of lenders representing 60% of all outstanding mortgages in the United States, counseling services, trade organizations and a group representing investors in mortgage backed securities.[5] Additional organizations joined over the following months.[6][7]

On December 6, 2007, President Bush announced that representatives of Hope Now have developed a plan to freeze interest rates for some subprime borrowers who would not be able to make higher payments if their interest rate rose. [8]

[edit] Strategy

The Alliance promotes a national 24 hour toll-free telephone number (known as the Homeowner's HOPE Hotline), through which the Homeownership Preservation Foundation (an Alliance member) offers free counseling to homeowners concerned about foreclosure[9] It also encourages homeowners in difficulty to contact their lender directly, and provides on its website a list of contact for member organizations[10]

Beginning in October 2007 mortgage lenders & servicing companies within the Alliance reached out to homeowners with past due accounts via mail, advising them of the Alliance and the assistance available. Over 200,000 letters were sent in the first batch, with additional mailings occurring in November, January & February 2008. In total one million letters have been sent.[11]

[edit] Relief options

Hope Now describes the assistance that it provides to homeowners as loan workouts. These workouts either result in establishing a repayment plan with the homeowner to bring them up to date, or a loan modification where the terms of the mortgage are modified in order to make it more affordable for the homeowner.

[edit] Results

Since first being mentioned in December 2007, the Homeowner's HOPE Hotline received more than 140,000 calls in 2007 (including over 45,000 in the first three days), and an average of 3,200 calls per day in January 2008[12][13]

[edit] Criticisms

[edit] Alliance membership

A current list of Alliance members is available here

[edit] See also

Subprime mortgage crisis

[edit] References

  1. ^ HOPE NOW Alliance Created to Help Distressed Homeowners. Hope Now Alliance (2007-10-10). Retrieved on 2008-05-10.
  2. ^ Christie, Les. "Hope Now's numbers don't add up to much help", CNNMoney.com, 2008-04-10. Retrieved on 2008-05-10. 
  3. ^ Christie, Les. "Housing relief efforts slow as pace of foreclosures rise", CNNMoney.com, 2008-04-28. Retrieved on 2008-05-10. 
  4. ^ President Bush Discusses Homeownership Financing. Office of the Press Secretary (2007-08-31). Retrieved on 2008-05-10.
  5. ^ a b Statement by Secretary Henry M. Paulson, Jr. on Announcement of New Private Sector Alliance – HOPE NOW. U.S. Department of Treasury (2007-10-10). Retrieved on 2008-05-10.
  6. ^ HOPE NOW Announces New Membership. Hope Now Alliance (2007-10-18). Retrieved on 2008-05-10.
  7. ^ HOPE NOW Lists All Alliance Members' Service Numbers. Hope Now Alliance (2008-01-29). Retrieved on 2008-05-10.
  8. ^ Fact Sheet: Helping American Families Keep Their Homes
  9. ^ Hope Now - Hotline Services. Hope Now Alliance. Retrieved on 2008-05-10.
  10. ^ Hope Now - Mortgage Lender Directory. Hope Now Alliance. Retrieved on 2008-05-10.
  11. ^ HOPE NOW: Fourth Round of Letters to At-Risk Homeowners Being Sent. Hope Now Alliance (2008-02-20). Retrieved on 2008-05-10.
  12. ^ 888-995-HOPE Hotline Averaging More Than 3,000 Calls a Day. Hope Now Alliance (2008-01-16). Retrieved on 2008-05-10.
  13. ^ "Industry group touts loan workouts", The Associated Press, 2008-03-03. Retrieved on 2008-05-10.