Best Practices in Foreclosure Prevention

It is national news that Michigan’s foreclosure rate is rising and causing an unprecedented demand for foreclosure prevention counseling, financial literacy classes, and rescue assistance. Many CEDAM members are taking on the foreclosure crisis by utilizing innovative strategies to combat mortgage foreclosure and its effects on communities.

Lighthouse CDC of Pontiac has moved almost exclusively to a group orientation and intake model of serving homeowners who are facing foreclosure.

The Community Action Agency in Jackson, Lenawee and Hillsdale Counties partnered with McDonald’s operators in the tri-county area to include information in the restaurants about free, nonprofit foreclosure counseling services available to homeowners.

Foreclosure Response of Kent County went door-to-door in targeted neighborhoods in Grand Rapids, resulting in a nearly 300% increase in homeowners contacting Home Repair Services for foreclosure counseling.

Kalamazoo Neighborhood Housing Services piloted a Foreclosure Rescue Fund in 2009 that provided homeowners in three target neighborhoods of Kalamazoo with up to $3,000 in mortgage debt relief.

U-SNAP-BAC Nonprofit Housing and Southwest Solutions provide foreclosure prevention counseling services in Detroit. Southwest Solutions has the largest number of bilingual English/Spanish counselors in Michigan.

Northwest Michigan Community Action Agency in Traverse City provides free counseling services to 10 different counties in northern Michigan.

The Homeowner Education Resource Organization (HERO) is a collaborative network in mid-Michigan including several counties, nonprofit counseling agencies, and many partners, including the Greater Lansing Housing Coalition. In 2008, the HERO collaborative provided counseling services to 1,022 households and kept 584 families in their homes.

CEDAM also teamed with our member CDCs, NeighborWorks®, MSHDA, financial institutions, homeownership counseling agencies, legal services providers, the United Way, and many others to launch the Michigan Foreclosure Task Force (MFTF). The MFTF is actively working to leverage resources, coordinate prevention and rescue efforts, bring additional training opportunities, and advocate for legislation limiting predatory lending and mortgage fraud.