Homeowners Protest 'False' Hope Now Alliance Homeownership Preservation Forum Call for Foreclosure Moratorium

Tuesday April 1, 2008 2 PM University of Pennsylvania Houston Hall, 3417 Spruce St.

PHILADELPHIA, March 31 /PRNewswire-USNewswire/ -- The Philadelphia Unemployment Project's Foreclosure Crisis Committee will hold an informational picket outside Houston Hall of the University of Pennsylvania on Tuesday April 1 at 2 PM where the Hope Now Alliance is holding a Homeownership Preservation Forum.

The picket is to call attention to the need for a more substantial response to subprime foreclosures than the heavily promoted Hope Now program provides. "With sub prime loans increasing dramatically in Philadelphia in the past three years from 20% in 2004 to 37% in 2006 we need more than a public relations road show to protect families and neighborhoods from this crisis," said John Dodds, Director of the Philadelphia Unemployment Project. "We hope that some families get relief and have our own housing counselors helping out, but this is not going to be enough to protect families in this city."

Hope Now Alliance Hotline has gained a reputation for causing frustration and minimal help to large numbers of homeowners trying to use their services. The Alliance is heavily dominated by the mortgage industry.

"They didn't even reach out for local housing counselors until this Tuesday for a large scale event a week away," said Pam Kennebrew a housing counselor for the Unemployment Information Center. "The phone number for the flyer they sent to local homeowners had a bad phone number to call to get information on the Homeownership Forum. A woman in Las Vegas was getting the calls."

The Bush Administration has repeatedly pointed to the HOPE Now Hotline as their answer to the foreclosure crisis while opposing bills to allow judges to modify unaffordable sub prime loans and to allow HUD to purchase and modify sub prime loans.

MSNBC reported that a recent story on the HOPE Now Hotline generated hundreds of emails from homeowners, the vast majority of whom were critical of the Hotline.

PUP is calling for a system to use city funded housing counseling agencies to do tentative loan modifications agreements for distressed homeowners and forward the information to mortgage servicers to approve the modifications. Many city neighborhoods had between 40% and 50% of all loans made in 2005 fall into the sub prime category. The numbers are even higher in 2006. Until the system is in effect PUP is calling for a moratorium on Sheriff Sales.

Philadelphia Neighborhoods with High Concentrations of Subprime Loans
2005

Neighborhood Number of Number of % of Subprime
Loans: Subprime Loans: Loans:
Allegheny West 210 87 41.4 %
Cedarbrook/Stenton 1447 634 43.8 %
Eastwick 599 274 45.7 %
Fairhill 73 35 47.9 %
Frankford 1034 449 43.4 %
Germantown 531 201 37.9 %
E. Germantown 530 277 52.3 %
Gray's Ferry 105 39 37.1 %
Hunting Park 143 73 51 %
Kingsessing 311 169 54.3 %
Lawncrest 1581 570 36.1 %
Logan/Ogontz/Fern Rock 854 446 52.2 %
Mantua 149 53 35.6 %
North Philadelphia/West 488 188 38.5 %
Oak Lane/East Oak Lane 618 240 38.8 %
Olney 983 433 44 %
Overbrook 1255 574 45.7
Point Breeze 416 171 41.1 %
Southwest Philadelphia 605 303 50.1 %
Tacony/Wissinoming 1636 589 36 %
Tioga/Nicetown 210 99 47.1 %
West Oak Lane 667 358 53.7 %
West Philadelphia/Cobbs Creek 791 375 47.4 %
West Philadelphia/Parkside 738 389 52.7 %
Wynnefield 442 176 39.8 %

Source: Philadelphia Inquirer analysis of Home Mortgage Disclosure Act data.

Developing a System to Head Off Wide Spread Subprime Mortgage Foreclosures in

Philadelphia

We need an agreement from lenders holding subprime loans to do loan modifications at a scale sufficient to head off large-scale foreclosures for Philadelphia homeowners and neighborhoods. With the volume of subprime loans on the books in this city, we believe that lenders and servicers will need help to prevent these foreclosures and the accompanying losses they will cause.

-- We ask that servicers agree to use the city of Philadelphia's extensive
network of housing counseling agencies to do work outs for Philadelphia
homeowners.

-- These agencies would put together sufficient information to determine
what a workable modification or other work out would be to resolve a
delinquent mortgage without loss of the home. This would allow
servicers to handle the volume of resets and defaults coming out of the
subprime mortgage crisis which hurts lenders, borrowers and
communities.

-- We would agree on a standard format to forward information to servicers
from homeowners and servicers would agree to offer affordable workouts
as computed by the counseling agencies.

-- Counseling agency staffs would be trained to implement the system.

-- We would have to work out agreeable criteria for affordable workouts
and servicers could spot check forms submitted to check for improper
submissions from the counseling agencies.

-- Foreclosure actions would stop while work outs are in process

-- Until such an agreement can be negotiated the city should institute a
moratorium on Sheriff's Sales to protect homeowners and property values
in our neighborhoods.

Without this public private partnership we think that large numbers of homes will be lost to foreclosure devastating families and leading to large scale abandonment of properties in many Philadelphia neighborhoods, to say nothing of losses to lenders and investors. Servicers will not be able to keep up with the numbers of loan modifications and workouts needed in the next few years in Philadelphia.

Philadelphia Foreclosure Crisis Committee
Philadelphia Unemployment Project
ACORN
Community Legal Services
Philadelphia Legal Assistance

Source: Philadelphia Unemployment Project

CONTACT: John Dodds of Philadelphia Unemployment Project,
+1-215-557-0822, +1-267-975-4706

Web site: http://www.philaup.org/

2008-03-31 23:00:25 0324148 PRNEWSWIRE