Financial Products

The foreclosure crisis was spurred by the proliferation of higher-cost and high risk financing that was often targeted to borrowers and communities of color.  These borrowers and neighborhoods have been disproportionately impacted by foreclosures and will need access to loan modifications and affordable mortgage loans if they are to stabilize and participate in any type of economic recovery.    
 
In order to avoid as many foreclosures as possible, the Home Affordable Modification Program (HAMP) and other federal foreclosure prevention programs must be made more efficient and expand their criteria to more effectively offer loan modifications to unemployed and underwater homeowners.  The program has also suffered from slow implementation and a failure by servicers to quickly convert trial modifications into permanent modifications.
 
Additionally, neighborhoods need new home buyers to fill the holes left behind by foreclosure. However, demand is weak and credit for home purchasing is scarce, especially in the communities hardest hit by the crisis. Prospective home buyers need creative and sustainable loan products designed with current market realities in mind, such as down payment assistance, and housing counseling to help them buy and keep a home they can afford.  Non-profit lenders such as Neighborhood Housing Services (NHS) of Chicago understand communities and specialize in making affordable loans. However, they need public and private leverage to expand their ability to lend to the broader Chicago region.  Additionally, there is a need for banks to return to the hardest hit markets and make safe and affordable mortgages.
 
This page details the efforts of RHOPI partners to advocate for improvements to local and national foreclosure prevention programs and to expand access to mortgage credit for prospective homebuyers in communities hit hard by the foreclosure crisis.