|HUD No. 09-005
January 14, 2009
HUD KICKS OFF SIX-CITY FINANCIAL LITERACY CAMPAIGN TO HELP TROUBLED HOMEOWNERS AVOID FORECLOSURE AND RESCUE SCAMS
"Keep Your Home. Know Your Loan." campaign promotes free housing counseling
NEW YORK - U.S. Housing and Urban Development Secretary Steve Preston today announced HUD's latest effort to prevent foreclosure by launching an aggressive consumer education campaign in six cities. HUD's "Keep Your Home. Know Your Loan." campaign will kick off in Chicago, Detroit, Los Angeles, Miami, New York and Phoenix. Preston launched the public awareness initiative at Neighborhood Housing Services, a New York City agency that offers clients free mortgage delinquency and default resolution counseling.
HUD's financial literacy campaign builds on the Department's continuing commitment to support its 2,600 housing counseling agencies across the country. In 2008, demand for HUD-approved counseling increased significantly. Meanwhile, the number of foreclosure rescue scams has also increased in response to the nation's housing crisis.
"This campaign is a call to action for families at risk of losing their homes," said Preston. "We want people to pick up the phone and call a HUD-approved housing counseling agency before they reach a point of no return. Keeping your home may be as easy as dialing (877) HUD-1515."
Many troubled homeowners seek help late in their financial crisis thereby limiting their loan modification options. HUD's campaign will target homeowners who are three-to-six months from defaulting on their mortgage, facing a reset on their adjustable-rate mortgage, or are experiencing a family crisis such as unemployment or skyrocketing health care costs in 2009.
The "Keep Your Home. Know Your Loan." campaign will include print, radio and television public service announcements, as well as a tool kit for non-profit counseling agencies that will support the effort. In each PSA, consumers are directed to call HUD's toll-free counseling hotline (877-HUD-1515) to arrange free face-to-face meetings with a counselor near them. Since most HUD-approved counseling agencies lack the resources for marketing and outreach, the Department is launching this campaign to help consumers earlier in their financial crisis and to fight the explosion of "pay-to-play" loan modification scams.
HUD's support for housing counseling agencies has grown significantly, from $20 million in 2001 to $50 million in 2008. In addition, federal support has now grown exponentially with $360 million in additional funds in 2008 specifically for foreclosure prevention counseling. HUD has requested another $65 million to support local housing counseling agencies in FY 2009.
Research finds HUD-approved housing counseling is effective to prevent foreclosure. A recent HUD study noted a 55 percent increase in the number of clients receiving foreclosure prevention counseling between 2006 and 2007. Of the approximately 136,000 families that completed this counseling during 2007, 45 percent were able to remain in their homes while 14 percent ultimately lost their home through foreclosure. This report also found that in the years leading up to the current crisis, more than 55 percent of low-income families seeking to buy their first home did not seek out pre-purchase counseling. This lack of counseling likely left them unprepared to make one of the biggest financial commitments of their lives and may have contributed to some of today's high rates of default and foreclosure.
Consumer Education Campaign
Challenge: In light of the economic conditions, including declining home values and the increase of resetting mortgage rates, many Americans are facing significant challenges that are contributing to the alarming rate of foreclosures. HUD-approved Housing Counseling Agencies can help homeowners navigate their financial challenges. However, counselors have more options to assist clients when homeowners call early in the process before they are in crisis.
Response: Over the next 6 months, the U.S. Department of Housing and Urban Development is launching a national consumer education campaign urging homeowners to seek free, HUD-approved housing counseling advice. The campaign is a call to action for homeowners and target communities and demographic groups that are most at-risk.
Campaign goal: Provide marketing and outreach materials and technical support to assist housing counseling and non-profit agencies that provide services to homeowners. The hope is to target current homeowners to assist them in keeping their homes by:
- Informing them of their loan terms and associated financial options;
- Encouraging them to seek assistance early – call to action; and
- Educating consumers on how to improve general financial literacy.
Components: The campaign provides a 'tool kit' which includes print, radio and TV PSAs, to support community, non-profit agencies that provide housing counseling services.
Partners: HUD is urging community, cultural, faith-based and political advocates to become involved in the campaign. In addition, HUD is seeking homeowner associations, real estate brokers and other members of industry to take an active role.
Target cities: Six cities were chosen for the launching of the campaign which are New York, Miami, Chicago, Detroit, Los Angeles, and Phoenix.
Campaign brand and hotline: Keep Your Home. Know Your Loan.
Call 1 (877) HUD-1515 for one of HUD's 2300 approved Housing Counseling Agencies in your local area. Visit http://www.hud.gov/keepyourhome.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.