Lenders Partner to Avoid Foreclosures

The system will focus on minority housing and foreclosure hot spot areas, and will offer new ways to avert foreclosing. The lenders involved are contributing more than $1 million to NeighborWorks, as well as providing valuable insights and information. The experience will be used to educate a force of counselors to help them navigate a very complex loan servicing process. While the system helps the borrowers, lenders make out well in the deal as well, since foreclosures are expensive for lenders in their own right.

Three solutions are put forward to avoid foreclosure: research and early warning systems, improved counseling and increased partnerships between cities, lenders and servicers. Research will assist in placing the system in key areas that are likely to have a larger than usual foreclosure rate, while counseling will help borrowers through the process of avoiding foreclosure. Partnerships will help the process by offering lending alternatives, providing notice of pending foreclosures and service for the borrowers in trouble. Participating lenders include Bank of America, Countrywide, Chase, Option One and eight other major lenders.