ICFE eNEWS #07-14 - July 13th 2007
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Delinquent Mortgage Borrowers Urged to Contact Lenders 

WASHINGTON - Comptroller of the Currency John C. Dugan unveiled two new Public Service Announcements (PSAs) aimed at encouraging delinquent mortgage borrowers to get help by contacting their lenders or a trusted housing counselor in order to avoid foreclosure.
"As these ads so powerfully underscore, doing nothing is the worst thing a delinquent borrower can do," Mr. Dugan said at a symposium on preventing foreclosures, sponsored by NeighborWorks America, which developed the PSAs in partnership with the Ad Council. As Comptroller, Mr. Dugan is a member of NeighborWorks America,s board of directors.

"And the longer the delay, the worse it gets," he added. "The record shows that the early stages of mortgage delinquency are the most crucial. The sooner borrowers reach out for help, the more options they have, and the more likely foreclosure may be avoided."
Mr. Dugan noted that in half of all foreclosures, lenders say borrowers do not make contact with them. Yet, more than one-third of those who reach out for assistance are successful in finding alternatives to foreclosure.

"All of this means that many of the 1.26 million borrowers who entered foreclosure last year might have been helped if they had acted earlier to contact their lender, or consult a trusted housing counselor," Mr. Dugan said.

The video ads will be targeted in areas where mortgage delinquencies are rising, Mr. Dugan said. They encourage homeowners experiencing financial difficulties to call 1-888-995 HOPE, a toll-free hotline staffed around the clock, seven days a week, by 85 qualified housing counselors from agencies approved by the Department of Housing and Urban Affairs.

In his speech, the Comptroller praised NeighborWorks America for the work it has done in creating programs that help families buy homes and avert foreclosures. He also cited private sector participants for supporting local foreclosure prevention partnerships, noting that many financial institutions have volunteered time to serve local NeighborWorks organizations and housing counseling boards.

"As for national banks, they too, have recognized the importance of these efforts ^ even though they have played a relatively smaller role in the subprime mortgage market than other lenders. Indeed, some national banks made the initial financial commitments that helped establish the Center for Foreclosure Solutions," Mr. Dugan said, adding that Fannie Mae and Freddie Mac also have made direct financial commitments that will help subprime borrowers.

"I wish the same were true of more of the non-federally regulated lenders and loan servicers that have fueled the rapid growth of the subprime market - and profited handsomely from it," he said. "It could make similar contributions to assist borrowers to avoid foreclosures wherever feasible."

The Comptroller added that the OCC and the other federal bank regulators have issued a statement on working with mortgage borrowers to avoid foreclosure that recognizes the benefits provided by reputable counseling organizations. The banking agencies also have said that banks will not be penalized for working responsibly with delinquent borrowers, within the limits of safety and soundness, to find reasonable workout arrangements rather than foreclosing on their loans immediately.

"In fact, we have encouraged banks to think creatively about using activities eligible for credit under the Community Reinvestment Act to pursue workable solutions for rising delinquencies and defaults," he said. "We have advised national banks that CRA credit is available for participation in foreclosure avoidance programs targeted to low- and moderate-income borrowers in the banks, assessment areas."

The Comptroller cited a number of other measures the agencies have taken to help homeowners avert foreclosure, including cooperative efforts with the states to extend federal guidance on nontraditional and subprime loans to state-licensed lenders.

"Through all of these endeavors, we have learned that it is not enough to achieve homeownership," Mr. Dugan said. "We - all of us operating in our respective roles - have to work hard to sustain homeownership. And I am confident that NeighborWorks America and its allies will continue to lead the way."

About the ICFE:

The Institute of Consumer Financial Education (ICFE) was founded in 1982 by the late Loren Dunton (creator of the Certified Financial Planner (CFP) designation).  The ICFE is dedicated to helping consumers of all ages to improve their spending, increase savings and use credit more wisely. 
The ICFE is an award winning, nonprofit, consumer education organization that has helped millions of people through its education programs and Resources. It publishes the Do-It-Yourself Credit File correction Guide, which is updated annually. The ICFE has distributed over one million Credit/Debit Card Warning Labels and Credit/Debit Card Sleeves world wide.

The ICFE became an official partner with the Department of Defense/Financial Readiness Campaign in June of 2004.The ICFE was an active partner in the California Student Debt Resource Awareness Project (CASDRAP) which resulted in a new web site: (studentdebthelp.org).  CASDRAP disbanded in 2010, shortly after the web site project was completed.  In 2011 the ICFE assumed the single sponsorship of the (studentdebthelp.org) web site and is now responsible for its content and operation.

The ICFE is also an on-line help for consumers who spend too much.  ICFE's spending help was featured in PARADE Magazine in the Intelligence Report section. The money helps and tips are from the ICFE's Money Instruction Book, our course in personal finance.

Visit the ICFE's other web sites at: www.financial-education-icfe.org and studentdebthelp.org.  Both sites helps consumers and students with mending spending, learning about the proper use of credit, budget and expense guidelines, how to set up and implement a spending-plan and also how to access financial education courses and how to teach children about money. Other ICFE services include: Ask Mr. G,  a free eNews, and an online resource center for students, parents and educators, plus financial education learning tools and a book store.

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