By Robert Schroeder, MarketWatch
RISMEDIA, Oct. 12, 2007-(MarketWatch)- Banks and mortgage companies are ramping up efforts to head off a wave of foreclosures by expanding and improving counseling services to troubled borrowers, the institutions and the U.S. government announced Wednesday.
A newly formed group called Hope Now, consisting of banks and lenders such as Citigroup Inc., First Horizon National Corp. and H&R Block Inc. subsidiary Option One Mortgage, will target at-risk borrowers by means of direct mail that encourages them to seek counseling.
Counseling organizations are also members of the group.
In addition, the mortgage servicers are taking steps to have dedicated teams of experts available to counselors as they work through foreclosure prevention with customers. A model for the companies includes a toll-free phone number, as well as an e-mail address and fax line.
Treasury Secretary Henry Paulson, announcing the steps Wednesday, said that the group consists of 11 of the largest mortgage servicers, representing 60% of the mortgages in the United States.
“Only through better integration of their efforts can mortgage counselors and mortgage servicers reach the greatest number of borrowers facing payments they can’t meet, and only with increased coordination can they be more effective in finding solutions for those homeowners,” he commented.
Some 2 million mortgages are due to reset to higher rates in the months ahead, and the White House and Congress have scrambled to find ways to help borrowers. Wednesday’s announcement stems from a foreclosure initiative announced by President Bush in late August.
Wednesday’s announcement also builds on $43 million in new grants for housing counselors, announced last week by the Housing and Urban Development Department.
“Housing counselors make a difference,” said HUD Secretary Alphonso Jackson on Wednesday. “They help people better understand their mortgages and to sign up for mortgages that they can afford.”
Robert Schroeder is a reporter for MarketWatch in Washington.
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