An official website of the United States government
Parts of this site may be down for maintenance Saturday, November 23, 7:00 p.m. to Sunday, November 24, 9:00 a.m. (Eastern).
News Release 2007-61 | June 25, 2007
Share This Page:
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 Development.
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."
Kevin M. Mukri (202) 874-5770
