Mortgage giant Freddie Mac announced today it is joining 14 financial institutions and the NeighborWorks Center for Foreclosure Solutions to cosponsor a new effort to assist borrowers in avoiding foreclosure.
Freddie Mac has agreed to contribute toward a $1 million contribution to the NeighborWorks Center to support an effort that will provide foreclosure avoidance counseling, undertake new research, and work with different public and private organizations to educate the public about foreclosure alternatives, according to an announcement today.
“We’re joining this initiative is to send a very important message to America’s late-paying borrowers: You don’t have to lose your house. You do have options. But it is up to you to pursue them,” said Ingrid Beckles, vice president of default asset management at Freddie Mac, in a statement. “We are delighted to join NeighborWorks and the other co-sponsors to launch this promising new effort to show borrowers how to avoid unnecessary foreclosures.”
Other co-sponsors of the effort include American General Financial Services Inc., a member of American International Group, and ABN AMRO Mortgage Group Inc., an indirect subsidiary of LaSalle Bank Corp., Bank of America, Chase, Citigroup, Countrywide Home Loans, HSBC North America, National City Mortgage Co., New Century Financial Corp., Ocwen Loan Servicing LLC, Option One Mortgage, Residential Capital Corp., Washington Mutual and Wells Fargo Home Mortgage.
A 2005 company-sponsored study that found 61 percent of late-paying borrowers unaware there are workout options that could help them keep their homes and 64 percent unaware that housing counselors are available to help explain these options. The study also found 74 percent of borrowers very interested in working with housing counselors to avoid foreclosure. Roper Public Affairs and Media conducted the study for Freddie Mac.
By working closely with lenders and non-profit organizations like NeighborWorks, Freddie Mac helps an estimated 50,000 financially troubled borrowers avoid foreclosure each year and stay in their homes, according to the announcement.
Freddie Mac is a stockholder-owned corporation established by Congress to support of home ownership and rental housing. Freddie Mac purchases single- family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage pass-through securities and debt instruments in the capital markets.