Published: January 30, 2009 08:47 am      

North Carolina works to fight foreclosure

Thursday, January 29, 2009 — While the foreclosure crisis began to rear its ugly head in 2005, North Carolina is being recognized as a leader in helping to avoid foreclosure.

So innovative is the State Home Foreclosure Prevention Project (SHFPP), which seeks to avoid foreclosures, that it is receiving national attention and is being considered as a national model.

According to the program, which was launched in November, mortgage loan servicers — the companies that collect payment and fees for mortgage holders — are required to give a homeowner with a subprime loan notice of a pending foreclosure 45 days prior to the filing of a notice of hearing in a foreclosure proceeding.

A subprime loan is defined as having been originated between Jan. 1, 2005 and Dec. 31, 2007 and must meet the definition of a spread home loan according to North Carolina General Statutes.

Stipulations in the program require the mailed notice to include information about the availability of resources to avoid foreclosures.

These include:

• Itemization of all past amounts due that have brought about the foreclosure notice.

• Itemization of any other charges that must be paid in order to bring the loan current.

• A statement of other option available that can be discussed with the mortgage lender, servicer or a government approved counselor.

• Contact information for the mortgage lender, servicer and counselor and

• Contact information for the complaint section of the office of the Commissioner of Banks.

In Stanly County, 203 properties faced foreclosure in 2007, while in 2008 that number increased to 240.

“The numbers began to changes towards the last quarter of 2008 which saw changes in several of the mortgage laws,” said Michael Huneycutt, clerk of courts for Stanly County.

Among those laws is SHFPP, which requires that, after the notice is mailed, the date and information about the notification is filed with the Administrative Office of the Courts, which are placed in a database.

This database is reviewed to determine which loans are appropriate for further prevention efforts.

If a situation meets all the criteria, the Commissioner of Banks then has the authority to extend, for one time only, the filing date for the foreclosure proceeding by up to 30 days beyond the earliest filing date established by the pre-foreclosure notice.

According to a statement in the emergency legislation signed by former Governor Mike Easley on Aug. 17, the General Assembly finds that home ownership is the primary means for low to moderate income families and individuals to build wealth.

The General Assembly also finds that home ownership and a healthy housing market are essential to the health and economic vitality of the state.

The General Assembly decided to ratify the legislation that would create the SHFPP on July 17, based on these findings as a way to help stabilize the housing market.

The legislation also provides for an excess of $14 million in funding for and support of the following initiatives:

• $600,000 in nonrecurring funds from the state Banking Commission for counseling services and

• $400,000 on nonrecurring funds to implement the Emergency Home Foreclosure Reduction Program.

This project and legislation became effective Nov. 1, 2008 and will expire on Oct. 31, 2010.

“Appearances are that lenders are trying to work things out once the borrower contacts the lender,” Huneycutt said of the Stanly County area.

He also said that more people are taking an active role in trying to prevent foreclosure.

“I’ve seen more people come in for hearings that want more information about how to resolve their situation. People are being more active than in years past,” he said.

Huneycutt said he’s seen the activity increase from about one-in-nine people requesting more information to about 50 percent.

For more information about the program, visit www.ncforeclosurehelp.org/StateForeclosurePreventionProject.aspx



Contact Tiffany Thompson at (704) 982-2121 ext. 24 or snaponline24@carolina.rr.com.