The 2008 financial crisis put an unprecedented number of American families at risk for foreclosure. Much of the problem can be traced to the proliferation of subprime and other exotic adjustable rate loans given to consumers with little regard to the borrower's ability to repay.
To help my constituents, I have held housing events and gathered resources for local homeowners. If you are having trouble with your mortgage or are facing foreclosure, following the steps below can help stabilize your situation. If you need further assistance, please don't hesitate to contact my district office.
1) Talk to your Lender or Loan Servicer — Your loan servicer is responsible for collecting your monthly loan payments and crediting your account. Speak to your loan servicer about refinancing options, including the federal programs detailed below, state finance initiatives, and any other loan modifications that are appropriate for your financial circumstances. If you require help in identifying the company that handles your mortgage you can use the online resource of MERS Servicer ID or its phone-based MERS Servicer Identification System at 1-888-679-6377. If your lender is not cooperative, talk to a legitimate housing counselor, and they may be able to help you with your lender.
2) Talk to a Legitimate Housing Counselor — Housing counselors can help you understand your mortgage options, negotiate with your lender and avoid foreclosure assistance scams. If you have worked with a qualified housing counselor, you should contact them again. The U.S. Department of Housing and Urban Development (HUD) provides a variety of resources for homeowners at risk of foreclosure. The Department funds free housing counseling services throughout the country. HUD-approved counselors can help homeowners understand the law and their options, organize their finances, and represent borrowers in negotiations with their lenders if this assistance is needed. If you need help locating a qualified a HUD-approved housing counselor in your area, call HUD's interactive voice response system at 1-800-569-4287.
HUD-Approved Housing Counseling Agencies in Rhode Island
Additional HUD resources for avoiding foreclosure
Also, free counseling is available through NeighborWorks, which is a national network of more than 240 community-based nonprofit organizations created by Congress to provide financial support, technical assistance, and training for community revitalization efforts. NeighborWorks provides a variety of resources for preserving homeownership in the face of rising foreclosure rates including HOPE for Homeowners, a toll-free national hotline that offers free foreclosure prevention and counseling advice from a third party, HUD-certified, not-for-profit network of counseling agencies dedicated to helping homeowners avoid foreclosure.
HOPE for Homeownership Hotline (in English and Spanish): 1-888-995-HOPE
Find a HUD-certified NeighborWorks organization
Information on the Center for Foreclosure Solutions
3) Contact State Foreclosure Prevention Programs — State Housing Finance Agencies administer a wide range of affordable housing and community development programs. A number of state HFAs have partnered with other entities (including nonprofit counseling agencies, local governments, state housing departments and lenders) to provide comprehensive foreclosure prevention and mitigation strategies.
Rhode Island Housing
Homeowners who suspect that they have been a victim of fraud, misleading information, or other deceptive practices, should contact their state Attorney General's office. These offices investigate complaints and sue lenders and other mortgage originators for alleged illegal behavior. In addition, several state Attorneys General have been instrumental is setting up multi-agency foreclosure prevention task forces that provide financial resources and proactive intervention for homeowners facing or at risk of foreclosure.
Rhode Island's Attorney General
4) Contact the Federal Government about Federal Foreclosure Assistance Programs — Making Home Affordable is a federal program designed to help homeowners refinance mortgages and avoid foreclosure. Contact their current lender, any other qualified FHA approved lender or a housing counselor. For more information or to find an FHA-approved lender in your area, go to the FHA website or call HUD's interactive voice response system at 1-800-569-4287.
Here is a helpful list of other government and nonprofit organizations that have developed foreclosure prevention programs-
National Community Reinvestment Coalition (NCRC)
NCRC is a national coalition of more than 800 non-profit organizations that seek to increase the flow of private capital into underserved communities. NCRC's Consumer Rescue Fund works with victims of predatory lending to provide mediation, refinancing or renegotiation of mortgages. Refinancing services are currently available in the Rhode Island and several other states.
NCRC’s Information and CRF Services line: 202-628-8866
Website for the CRF
National Council of LaRaza (NCLR)
NCLR is the largest national Hispanic civil rights and advocacy organization in the United States. NCLR's Homeownership Network of 42 community-based organizations provide home ownership counseling and can intervene between borrowers facing financial crisis and the lenders and/or mortgage servicer.
Contact NCLR’s: 202-785-1670
Neighborhood Assistance Corporation of America (NACA)
NACA is a national non-profit advocacy and homeownership organization. NACA's Refinance Program offers new loans to eligible homeowners with unaffordable mortgages. NACA's Home Save program gives counseling and financial assistance to eligible homeowners who are at risk of foreclosure.
NACA's Information and Refinancing Services line: 1-888-302-NACA
Website for NACA
Government Sponsored Enterprise (GSE) Resources:
Freddie Mac helped to develop and fund Don't Borrow Trouble, a comprehensive consumer awareness and foreclosure prevention campaign. In addition, Freddie Mac has partnered with national non-profit organizations, counseling agencies and several lenders on a foreclosure-avoidance initiative designed to reach out to delinquent borrowers early on and provide appropriate counseling through trusted intermediaries to help avoid foreclosure.
Information on Don’t Borrow Trouble
Legal Resources — In addition to the resources above, some homeowners may want to retain an attorney to help them navigate the legal system:
National Association of Consumer Advocates
The National Association of Consumer Advocates (NACA) is a nationwide organization of more than 1000 attorneys who represent and have represented hundreds of thousands of consumers victimized by fraudulent, abusive and predatory business practices. NACA attorneys have represented thousands of victims of predatory lending practices. The legal services are provided by legal service lawyers and private practice attorneys who provide free or low-cost legal representation.
Contact NACA: 202-452-1989
Find an attorney
(Prepared by House Financial Services Committee, Democratic Staff)