State Agencies To Finance Foreclosure Counselors

February 6th, 2008 | Tags: Foreclosure

Two state agencies in North Carolina came forward to finance non-profit counselors to help foreclosure victims in their hour of need. The Attorney General of the state and Commissioner of Banks promised $300,000 for the purpose. This announcement was made at a news conference. At the conference the problem about raising awareness was also raised. The victims were told to avail of the services of a toll free number.

Meanwhile foreclosures increased by 9.4% in North Carolina during 2007. The economy slumped, real estate prices fell while interest rates rose. The office of the commissioner apprehends that this year there will be another rise of 20% to touch 60,000. For some the loan amount is more than the value of the house and this means the vanishing of dreams.

Foreclosures create a traumatic state that paralyzes the borrower and cannot goad the individual to contact the lender to seek out an alternative. When finally they manage to take the initiative it is already too late, says Louis Mack a spokesperson of Freddie Mac, a mortgage company sponsored by the government. Mack is involved with a non-profit group in Cabarrus County giving free advice. Foreclosures touch upon the emotion of the victims and they are ashamed of the predicament and often do not know whom to turn to for help. There is a hotline that gives round the clock advice across the nation.

Over 20 non-profit organizations have come forward to take part in the programme. $1,000 will be granted to the group for each house owner that is helped, said Mark Pearce the Deputy Banking Commissioner. Enquires will be initiated against those lenders suspected of foul play.

Federal grants worth $180 million will be sought for counseling by North Carolina Housing Finance Authority from a fund that has been set aside by Congress to replenish exhausted funds. The Attorney General Cooper said that the money released from his office came from legal settlements of consumers and for assessments made by banks to pay for the sate banking commission.

Foreclosures hurt the local economy by bringing down the value of neighbouring properties. The point being stressed was that this was not a bail out but that lenders understand the grim situation affecting all. In 1999 North Carolina had passed the first anti-predatory lending laws and perhaps after its expansion it has led to a fall in the overall number of foreclosures.