Alabama Statewide Foreclosure Initiative: what churches should know to minister to those struggling in mortgage crisis
Written: 4/24/2008
The following article was written by North Alabama United Methodist David Higginbotham. He is Vice President Alabama Title Co., Inc.
Bishop Willimon says, "I am pleased that David Higginbotham is involved in this initiative and has brought it to the attention of our United Methodist pastors and churches. I urge all our pastors to utilize this new hotline in their ministry to those who suffer in the current mortgage crisis."
Recently the Federal Reserve Bank branch office in Birmingham created the Alabama Statewide Foreclosure Prevention Initiative.
This task force is comprised of the Department of Housing and Urban Development (HUD), NeighborWorks America, several Alabama banks, the Alabama Department of Banking, the Alabama Bankers' Association and other groups. The purpose of the Alabama Statewide Foreclosure Initiative is to address the growing problem of foreclosures in the state.
Traditionally, foreclosures occur when a borrower experiences a disruption in income. Often people who face foreclosure have recently become disabled, lost their jobs or divorced. In other cases, borrowers' interest rates have readjusted upwards and they have been unable to refinance because they do not have enough equity in their homes.
Regardless of the financial causes, the current foreclosure trend in our state is a silently growing humanitarian crisis. People not only lose their homes, which in most cases is their most valuable asset, but also their ability to obtain even a modest amount of credit.
One objective of the Alabama foreclosure initiative is to make people aware of credit counseling services that are available through the federal government and numerous local agencies. Alabama currently has 56 agencies that are accredited by HUD to provide credit counseling.
Early intervention is key. Many people in foreclosure do not seek help because they are embarrassed or depressed. Often they do not even open their mail.
Foreclosures also appear to affect some communities disproportionately. Foreclosed properties are frequently sold at less than market value and begin a softening in the values of neighboring houses. Soon other borrowers may find themselves losing equity.
The Alabama Statewide Foreclosure Prevention Initiative is reaching out to organizations such as the United Methodist Church that have a "trust bank" in affected communities. These organizations can help identify people in financial distress and assist them by referring them to credit counseling.
Through HUD and NeighborWorks America, the federal government provides the new HOPE Hotline at 1-888-995-HOPE. This hotline is available 24-hours a day in Spanish and English. Although some counseling is provided over the phone, callers will generally be referred to a local counseling agent for a face-to-face meeting.
For list of credit counseling agencies accredited in Alabama, please log on to www.hud.gov and click on the keyword "Avoid Foreclosure."
Although monetary assistance is not provided by these groups, credit counselors are often able to help borrowers avoid foreclosure by working out alternative repayment plans with lenders.