Home Foreclosure Help's Just a Call Away

Raleigh, N.C. — Two state agencies Monday announced plans to connect more than 20 North Carolina counseling agencies with a national hotline for homeowners who are at risk of foreclosure.

"Finding a foreclosure notice tacked to the door is terrifying for a family struggling to make ends meet," state Attorney General Roy Cooper said.

Cooper's office and the Office of the Commissioner of Banks will pay $300,000 for local financial counselors to take referrals from the national HOPE Hotline (888-995-HOPE).

The counselors are expected to meet one-on-one with more than 400 North Carolinians and advise them on options to avoid foreclosure. Reimbursement from the state will increase for counselors who help people avoid foreclosure, Cooper said.

"It's tragic when families lose their homes, especially when it could be prevented. One toll-free call could give them the advice they need to stop foreclosure," Cooper said.“

"Homeowners struggling to pay their mortgage need to know there are resources available to help them avoid foreclosure,” Deputy Commissioner of Banks Mark Pearce said.

In 2007, North Carolina saw a 66 percent increase in foreclosure filings, when lenders file legal notice that they intend to take over or sell a property. Foreclosure "starts" – the step at which lenders notifies homeowners that they are in default, begining the months-long foreclosure process – were also up 9.4 percent statewide.

In 2008, foreclosure starts were expected to jump between 10 and 20 percent to around 60,000 homes, according to the Office of the Commissioner of Banks.

Homeowner Francis Aremo said he is among those who have benefited from the help offered by the hotline.

After he defaulted on his mortgage, he offered his lender thousands he had in savings to catch up, but the lender was not interested, he said. "They want to get my house," Aremo said.

With the help of counselors contacted through the hotline, however, Aremo said he was able to negotiate for better terms and keep his house.

"I pay less. I sleep better now," Aremo said. "You can see how excited I am."

National hotline counselors provide budgeting advice and connect homeowners to their mortgage company to discuss options.

Local counselors who take referrals for North Carolinians will meet face-to-face with homeowners, review their loan documents and financial information and guide them through the process of negotiating with their lender. If they suspect predatory lending, local counselors will also connect homeowners to other resources.

Finding a solution to foreclosure is in the best interest of the homeowner, lender and the state's economy, Cooper said.

Mortgage lenders can lose between $40,000 and $50,000 in net value when a typical home loan is foreclosed. The Center for Responsible Lending, based in Durham, estimates that property values for houses of a foreclosed home in a city drop an average 0.9 percent.

"If the mortgage lender is OK with this and the borrower is OK with this and you are able to avoid foreclosure, you are helping the economy," Cooper said.

“Foreclosures are hurting families across our state and damaging our neighborhoods and communities,” Cooper added. “It’s in all of our interest to help homeowners find a way out of foreclosure when possible.”