Amendment Provides In-Person Outreach and Counseling to Decrease Foreclosures

Washington, DC – Rep. Joe Baca (D-Rialto) today introduced an amendment to the FHA Housing Stabilization and Homeownership Retention Act (H.R. 5830) that will help borrowers in default and foreclosure by promoting free outreach to them by counseling agencies and providing more in-depth service through in-person counseling—measures that will help save homes.  The amendment was unanimously agreed to by the House Financial Services Committee, an exclusive committee on which Rep. Baca serves, and the bill now awaits future consideration in the full House of Representatives.

“Today we were able to directly do something about our current mortgage crisis,” said Rep. Baca.  “I thank the members of the Financial Services Committee for approving my amendment, which will allow more families to keep their homes.  The American people need to know that Congress is not going to idly stand by.  Help is on the way.”

Inconsistent and improper notice in the foreclosure process negatively impacts borrowers, particularly Hispanic, African-American, low-income, and elderly borrowers.  Providing early default notice, assistance, and counseling through the foreclosure process will increase loan modifications and decrease foreclosures.  In the 43rd Congressional District, 4,523 families have already lost their homes this year, accounting for nearly 10% of all foreclosures in the state of California.  Over 11,000 households are currently in default in the San Bernardino County. Unfortunately, 50% of homeowners in default never contact their lenders and end up foreclosing.

“The great thing about this amendment is that we already have all the tools necessary to fix the current crisis,” added Rep. Baca.  “The funding is there; trained professional counselors are there, all we need to do is make sure homeowners know they can get help.  Face-to-face counseling will ensure that more families keep their homes, save money and keep hold of their part of the American Dream.”

Experts say that when a homeowner is mailed a notice of default or foreclosure they usually do not open the letter.  Counseling is available but 56% of homeowners are not aware that free counseling exists.  Reaching out to borrowers in person and providing in-person counseling is more effective than a phone call or mailing a letter. It lets the borrower know their options to avoid foreclosure and is the last line of prevention and defense. This is good public policy and good business because it will increase loan modifications and decrease foreclosures.

“Those of us that upon graduation decided to pursue a college education can relate through our personal experiences how important it is to have an in-person counselor to guide you,” concluded Rep. Baca.  “We remember how important it was to have the right information, the right direction.  For the individuals that need help, this is no different.”