Cccs of Atlanta - PowerPoint

Document Sample
Cccs of Atlanta - PowerPoint Powered By Docstoc
					A Report from Colleen Hernandez
                   June 25, 2007
                                                     888-995-HOPE

A National Non-Profit
A National Hotline
    – Available to any homeowner in America
    – At no cost to the homeowner
    – 24 hours / 7 days
    – 85 trained foreclosure prevention counselors at 5 nonprofit HUD-
      approved counseling agencies throughout the country




                                                                         2
                                            A Growing Need


Number of HOPE Hotline calls skyrocketing
                 (April 06 vs. April 07)




   1000                               650




    500      75
                                                Daily Calls
     0
          2006                 2007

                                                              3
                                    HOPE Hotline is Effective

For every 100 calls
                                            12 work out



47 counseling sessions
                                             8 sell home

                                           20 avoid foreclosure


        Thus, conservative assumption is 42% of counseled
                homeowners avoided foreclosure


                                        Source: Q1 2007 HOPE Hotline Results
                                                                               4
                            Daily Impact to Industry

650 calls/day
                                 76 Work out/day



305 counseling
 sessions/day
                                52 sell home/day
                         128 foreclosures prevented/day
                                 ($30,000 per foreclosure)




       Counseling saves $3.84 million/day

                             Source: Q1 2007 HOPE Hotline Results
                                                                    5
Outcomes: 25% are recommended for loan workouts

                          National 888-995-HOPE
                          Counseling Outcomes
                                 Q1 2007
                     Referred to
               Neighborworks/NHS (as
                                            Lender W orkout
                  primary outcome)
                                           Suggested/Pending
                          13%
                                              /Reinstated
                                                  25%

      Credit Counseling
     Consolidation Plan
                                                     Seriously consider
             1%
                                                  selling/placing house up
                                                           for sale
      More Counseling
                                                             17%
     Adv ised/Scheduled
             7%
                                              Referred to other agency
                                              (i.e. mental health, utility
               Budget Improv ement                 assistance, etc.)
              Needed Before W orkout                     12%
                          25%




                                                                             6
26% of callers hear about the hotline from their lender

   How did Homeowner hear about 888-995-HOPE?
                   Q1 2007       Professional/Friend
                                                       Referral
       Lender
                                                         22%
        26%

                                                                       up from 17% Q3 06




   Urban League
                                                            Unknown/Other
       1%
                                                                  8%
          Mailer
             6%
                                                      Radio

            Internet                                  11%

              5%
                                           Newspaper/Print
                       TV
                                                 9%
                       4%
                            Neighborworks
                            Organization
                                 8%




                                                                                           7
           62% have already missed more than two payments

                 Loan Status at First Contact with 888-995-HOPE
                                      Q1 2007


                                    Unknown/Unsure
                                                        <30 days late
                                          3%
                                                            14%



                    120+ day late
                        30%


                                                                  30-60 days late
62% have already missed two                                             21%
or more payments when they
call, up 5 points from last
quarter



                                     61-120 days late
                                           32%




                                                                                    8
                                       Wide variety of loan products

               Loan Type Per Homeowner Report
                              Q1

                         Homeowner does not
                              know
   Other loan product          18%
                                               Fixed Rate under 8%
           2%
                                                      21%

  FHA/VA ARM
       0%


FHA/VA Fixed
                                                        Fixed rate 8%+
    5%
                                                             14%

 80/20 Loans
     5%
                Inerest Only
                                                       ARM currently
                    1%
                                                         under 8%
                                                           10%
                           ARM currently 8%+
                                 24%




                                                                         9
    53% of households earn <$36,000 at first contact

         Annual Gross Income at Time of Counseling
                           Q1

                        $72,000 or more
                              8%
                                          Less than $20,000
                                                 22%
$50,001 - $72,000
      17%




                                            $20,000 - $36,000
    $36,001 - $50,000
                                                  31%
          22%




                                                                10
                                                               Operations

Counseling Capacity
•   85 counselors have the capacity to do 5,525 counseling sessions a month,
    or 66,300 sessions a year
•   Who pays for counseling?
     – Initial grant from GMAC-RFC: $20 million
     – Recent grant from Fannie Mae: $3.25 million ($2m for counseling)
     – Lenders and Servicers: J.P. Morgan Chase, Ocwen, Countrywide,
       Washington Mutual, Citi, HSBC




                                                                               11
                                                    5 Major Challenges

•   Reaching the hard-to-reach borrower


•   Engaging in counseling activity that empowers the homeowner


•   Linking counseling resources together


•   Connecting with the servicers to reach full resolution


•   Getting results that benefit homeowners and mortgage banking industry




                                                                            12
                                       Reaching the Hard to Reach

•   50% of homeowners who go through foreclosure never talk to their lender.
    WHY?
•   Freddie Mac commissioned the Roper Study in 2005. And the findings
    were
     – 28% said there was no reason to talk to servicers
     – 17% said they could take care of the problem themselves
     – 61% were unaware that the lender could help them, i.e. had any tools
       or flexibility to work out the problem
     – 6% reported feeling too embarrassed to call




                                                                               13
                                                  Calling Early: It Helps

•   Currently, 62% of callers to the HOPE hotline have already missed 2
    payments
•   Options are more limited, especially for re-finance, if the borrower’s credit
    score is reduced because of missed mortgage payments
•   A study by CCCS Atlanta of 1800 households counseled demonstrated a
    dramatic difference in foreclosure sale avoidance between homeowners
    who called at 3.7 months delinquency vs. those that called at 4.7 months
    delinquency


•   The message in the Ad Council campaign is all the more important:


          “Nothing is Worse Than Doing Nothing”
                                                                                    14
                            Counselors by Location

                                    Novadebt
                  Auriton
                   15                 19


 CCCS
San Fran
  11




                                               CCCS
    Springboard                                Atlanta
           19                                   21




                                                         15
                                     What Happens In A Call


4 parts:
1. Set expectations
2. Listen to the story
3. Look at financial facts and develop options
4. Make contact with servicer




                                                              16
                           Establishing Standards for Counseling

•   NeighborWorks® America has taken the lead to establish standards for
    pre-purchase counseling and is working on a similar set of standards for
    foreclosure prevention counseling.
•   The standards are divided into
     – Competency
     – Skills
     – Training
     – Operational Knowledge
     – Code of Ethics




                                                                               17
                                                       Profile of Counselors

Our counselors:
•   Have an average 4.5 years of experience as foreclosure prevention counselor
•   Earn competitive, non-profit wage of $16.97/hr plus full benefits
•   Obtain counseling certification through either the Association of Independent
    Consumer Credit Counseling Agencies (AICCCA) or National Foundation for
    Credit Counseling (NFCC) counselor certification program within 6 months of
    being hired as a counselor.
    –   Includes passing a 3rd party proctored exam
•   Receives agency-provided, on-going foreclosure prevention training, through
    internal and external means.
•   Are employed by HUD-approved agencies.




                                                                                    18
                                    Count on Quality

•   Abandoned calls
     – Goal: less than 5%
     – Actual: 3.4% YTD 2007


•   Conversion rate
     – Goal: 50%
     – Actual: 47% YTD 2007


•   Time to answer calls
     – Goal: less than 30 seconds
     – Actual: 25.8 seconds

                                                       19
                                                     The Value Proposition

•   We reach the hard-to-reach borrowers, the 50% of families who foreclose who
    never talk to their lenders.

•   Average daily number of calls, May, 2007 is 650. Call volume increases 25% every
    6-8 weeks

•   Our capacity keeps pace with call volume increases; quality stays high.

•   At least 42% of the homeowners we counseled have action plans to avoid
    foreclosure

•   That’s 128 potential foreclosures avoided DAILY at a savings to industry of $3.84
    Million



                                                                                        20
                                        Who Calls the HOPE hotline?

Our partner, CCCS Atlanta, reported of those they counseled in 2006.
    – Average age: 43
    – Marital status: Married 50%, Single 36%, Divorced 14%
    – Ethnicity: 47% African American, 45% Caucasian, 4% Hispanic
    – Gross Annual Income: $36,000
    – Monthly deficit: $702
    – Mortgage payment: $1,110
    – Unsecured debt: $14,771
    – FICO score: 501




                                                                       21
                                      Linkages to community efforts

•   NeighborWorks and the Foundation have developed a website available to
    all of our telephone counselors
•   nonprofitreferral.org links the homeowner to multiple services in their
    area:
     – Unemployment assistance
     – Legal aid
     – Utility assistance
     – Property tax relief
     – Rescue funds
     – State attorneys general




                                                                              22
                     America is Mobilizing to Fight Foreclosure

•   National NonProfits
•   Industry
•   State and Local governments
•   Community groups
•   HUD
•   Congress




                                                                  23
                Partners coalesce around key messages


• Foreclosure is not inevitable
• Help is available for free 24/7 at 888-995-HOPE
• Call early—you have better options
• The bank doesn’t want your house; they want to talk
  to you
• NOTHING IS WORSE THAN DOING NOTHING



                                                        24

				
DOCUMENT INFO
Description: Cccs of Atlanta document sample