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					                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                         Alabama
ALABAMA’S FORECLOSURE CHALLENGE is in danger of                                                      ASSESSMENT: Alabama is one of just
                                                                                                     three states that had not moved
worsening due to the high proportion of subprime                                                     significantly to address its foreclosure
loans made in the state in 2005 and 2006. Although                                                   problem, whether through legislation,
                                                                                                     regulation or other consumer outreach and
Alabama has fared somewhat better than neighboring                                                   protection activities, by October 2008. Its
states Georgia and Mississippi, nearly one in six                                                    current predatory lending law was passed
                                                                                                     prior to 1998 and lacks high-cost loan
homeowners is projected to have their property values                                                protections. A mortgage fraud bill has been
negatively affected by neighboring foreclosures from                                                 proposed, but policy makers should take
                                                                                                     further actions to prevent future problems
subprime mortgages through 2010.                                                                     related to high-cost loans.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 60 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    30 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    16 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,940 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $406 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                      Alaska
ALASKA’S DISTANCE from the continental United States                                                 ASSESSMENT: As of October 2008,
                                                                                                     Alaska had taken little action to assist
has not insulated it from foreclosure problems.                                                      homeowners facing foreclosure. Alaska’s
Projected through 2010, one in 39 homeowners could                                                   response does not align with the severity of
                                                                                                     its challenges. Many states with similar
be in foreclosure as a result of a subprime-related                                                  projected foreclosure rates have enacted
loan—just slightly better than the U.S. average of one                                               high-cost lending laws to protect
                                                                                                     prospective homeowners and have
in 33 homeowners. Close to one in three Alaskan                                                      implemented loan-refinance programs for
homeowners could lose thousands of dollars in value                                                  those facing foreclosure.
                                                                                                                                     *As of December 2008
in their home as a result of the spillover effects of
neighboring foreclosures.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 39 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    29 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $4,013 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $190 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                             Arizona
ONE IN 18 HOMEOWNERS IN ARIZONA is estimated to                                                      ASSESSMENT: Arizona was one of the
                                                                                                     first states to establish a consumer hotline,
be in foreclosure by the end of 2010, as a result of a                                               and more recently passed a mortgage fraud
subprime-related loan. Years of easily accessible credit                                             law, formed a foreclosure task force and
                                                                                                     negotiated loan modification terms with
and relatively low home prices that facilitated                                                      lenders on behalf of homeowners. However,
homeownership in the state have ended, leaving in their                                              the state lacks a predatory mortgage
                                                                                                     lending law to prevent future problems. In
wake stricter lending terms and stagnating home                                                      December 2007, the governor met with the
appreciation. Arizona is one of about a dozen states with                                            state’s major lenders to discuss voluntary
                                                                                                     loan modifications and to encourage
a higher estimated foreclosure rate than the U.S.                                                    outreach to distressed borrowers before
                                                                                                     their loans reset, but no firm agreement on
average of one in 33 homeowners. It must cope with a
                                                                                                     loan modifications was achieved.
subprime foreclosure crisis that threatens to have ripple                                                                            *As of December 2008

effects on nearly two thirds of neighboring Arizona
homeowners’ property values.



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 18 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    28 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    63 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $7,231 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $8.7 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                         Arkansas
ARKANSAS’ TOTAL FORECLOSURE INVENTORY at the                                                         ASSESSMENT: Arkansas has responded
                                                                                                     to the widespread use of subprime lending
end of 2007 was less severe than in many states. One                                                 more quickly than a number of other states,
in 64 Arkansas homeowners is estimated to lose their                                                 principally through legislation. The state has
                                                                                                     approved a comprehensive high-cost
home by the end of 2010 because of a subprime loan.                                                  lending law and has required brokers to
That is better than the U.S. average of one in 33                                                    align their practices with consumer interests.
                                                                                                                                     *As of December 2008
homeowners. Still, more than one in 10 homeowners
will likely have their property values affected by
neighboring foreclosures.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 64 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    26 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    11 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,838 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $131 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                   California
ONE IN 20 CALIFORNIA HOMEOWNERS is projected to                                                      ASSESSMENT: In the face of this crisis,
                                                                                                     California created a statewide task force to
be in foreclosure by the end of 2010, as a result of                                                 consider possible interventions. Legislators
their subprime loan made in 2005 and 2006—                                                           subsequently passed laws instituting both a
                                                                                                     30-day notice period and a requirement that
exceeding the U.S. average of one in 33 homeowners.                                                  lenders discuss loan restructuring options with
The state’s subprime crisis has transformed into a                                                   homeowners before beginning the foreclosure
                                                                                                     process. In late September 2008, state
foreclosure crisis. Years of rising home values and new                                              lawmakers also approved the creation of a
loan products made homeownership a possibility for                                                   refinance program for homeowners in danger
                                                                                                     of foreclosure. Counseling is also now
many individuals. The boom ended abruptly, however,                                                  available through grants from the National
                                                                                                     Foreclosure Mitigation Counseling program.
as house prices stagnated and then fell, and once-
                                                                                                                                     *As of December 2008
favorable lending terms reset to include higher interest
rates and principal payments, revealing the true costs
of the new mortgage loans.



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 20 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    24 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    64 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $14,282 on
                                                                                                         High-cost lending laws
    average in property value                                                            Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $107 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                     Colorado
COLORADO’S CHALLENGES ARE IMMEDIATE. One in 25                                                       ASSESSMENT: Colorado has responded
                                                                                                     swiftly to its foreclosure problems, working
homeowners is likely to fall into foreclosure by the end                                             to lessen the impact both on homeowners
of 2010 as a result of a high-cost loan—exceeding the                                                currently in crisis and those who may pursue
                                                                                                     loans in the future. The state has confronted
national average of one in 33 homeowners. This could                                                 the crisis from a number of policy angles,
lead to a dramatic spillover effect: the subprime                                                    including laws requiring lenders to assess
                                                                                                     borrowers’ ability to repay and instituting a
foreclosure crisis threatens to affect the property                                                  60-day notice period before foreclosure for
values of half of all Colorado homeowners.                                                           the homeowner to seek assistance.


                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 25 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    22 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    51 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $4,251 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $3.2 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                       Connecticut
IN THE EARLIER YEARS OF THIS DECADE, Connecticut’s                                                   ASSESSMENT: Connecticut has moved
                                                                                                     to help both current and future
housing market experienced the same boom as other                                                    homeowners. A state-funded program
affluent states in the Northeast. Now, the fiscal crisis                                             facilitates refinancing, and additional laws
                                                                                                     protect borrowers through the foreclosure
and home price stagnation are contributing to                                                        process. Legislation enacted in 2008
payment problems for subprime borrowers.                                                             substantially strengthened the state’s
                                                                                                     lending laws, making them among the
Projections through the end of 2010 show that one in                                                 strongest in the country.
                                                                                                                                     *As of December 2008
49 Connecticut homeowners may fall into foreclosure
as a result of their high-cost loan. And those
foreclosures are likely to affect the property values of
more than one third of the state’s homeowners,
costing them on average more than $4,600 each.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 49 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    35 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $4,624 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $2 billion is projected to be lost from the combined state                                           consumer interests
    and local tax base                                                                                                = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                    Delaware
AS IN NEIGHBORING MID-ATLANTIC STATES, home prices                                                   ASSESSMENT: Delaware has taken steps
                                                                                                     to respond to its foreclosure-related
rose and opportunities for homeownership in Delaware
                                                                                                     challenges. Programs including a fund to
grew significantly in the earlier part of this decade. One                                           provide small emergency assistance loans
quarter of all loans made in 2005 and 2006 were                                                      and a refinancing plan should help
                                                                                                     homeowners who are struggling to pay their
subprime, and the state’s challenges are expected to
                                                                                                     loans in the near term. The state has also
worsen. Projections show that one in 43 Delaware                                                     begun to take advantage of National
homeowners will experience foreclosures by the end of                                                Foreclosure Mitigation Counseling grants to
                                                                                                     offer counseling to distressed homeowners.
2010 because of subprime loans—and 36 percent of all                                                                                 *As of December 2008
state homeowners could feel the ripple effects.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 43 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    25 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    36 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $4,300 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $390 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                 District of Columbia
THE DISTRICT OF COLUMBIA FACES A SUBPRIME                                                            ASSESSMENT: The District’s lending
                                                                                                     laws are quite strong, banning negative
FORECLOSURE CRISIS, with one in 27 homeowners
                                                                                                     amortization and prepayment penalties,
expected to fall into foreclosure by the end of 2010 as                                              and an additional law increasing consumer
                                                                                                     protection in the lending process became
a result of their high-cost loan—exceeding the national                                              effective in January 2008. Another recent
average of one in 33 homeowners. This translates into                                                law prohibits foreclosure rescue scams, and
                                                                                                     the District stepped up its help to
a much larger problem for the District: four fifths of all                                           distressed homeowners with its Foreclosure
homeowners—the greatest proportion nationwide—are                                                    Mitigation Kit, directed at residents in
                                                                                                     danger of foreclosure.
expected to be negatively affected by those subprime-                                                                                *As of December 2008

related foreclosures, with an estimated average loss of
almost $20,000 in home value.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 27 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    21 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    82 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $19,158 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $4.3 billion is projected to be lost from the city’s tax base                                        consumer interests

                                                                                                                      = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                Florida
ONE IN 26 FLORIDA HOMEOWNERS is estimated to be                                                      ASSESSMENT: Florida has increased
                                                                                                     its response to its foreclosure crisis, which
in foreclosure in the coming years as a result of
                                                                                                     ranks among the worst nationwide. In
subprime-related mortgages—exceeding the U.S.                                                        addition to its high-cost lending law to
                                                                                                     protect future borrowers, the state created
average of one in 33—and the state is one of six
                                                                                                     a foreclosure task force in spring 2008,
projected to experience the highest rates of                                                         began offering counseling to distressed
                                                                                                     homeowners and enacted legislation to
foreclosures, primarily over the next two years. The
                                                                                                     prevent foreclosure rescue scams.
state’s coming challenges only exacerbate its existing                                                                               *As of December 2008

struggles. The ripple effects of the state’s foreclosures
could cause Florida to lose almost $36 billion from its
state and local tax base.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 26 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    32 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    54 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $9,777 on
                                                                                                         High-cost lending laws
    average in property value                                                            Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $35.9 billion is projected to be lost from the combined                                              consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                           Georgia
ONE IN 27 GEORGIA HOMEOWNERS is estimated to be                                                      ASSESSMENT: Georgia has taken some
                                                                                                     initial steps to respond to its foreclosure
in foreclosure by the end of 2010—exceeding the U.S.                                                 problems. The state’s high-cost lending law
average of one in 33. The state is one of 10 with the                                                covers different loan types, limits excessive
                                                                                                     points and fees and calls for better disclosure,
highest rates of projected foreclosures resulting                                                    but many Georgia homeowners have still
specifically from subprime loans made in 2005 and                                                    suffered under high-cost loans. Legislation
                                                                                                     enacted in May 2008 aims to prevent
2006. The state’s foreclosure challenges could lead to                                               foreclosure rescue scams and the state began
one fourth of its homeowners losing an average of                                                    offering counseling to homeowners in danger
                                                                                                     of default through the National Foreclosure
$3,000 in property value.                                                                            Mitigation Counseling program.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                 STATUS*
    1 in 27 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    29 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    25 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,884 on
                                                                                                         High-cost lending laws
    average in property value                                                            Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $1.8 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                           = action taken        = no action taken

                                                                                                                                        *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                  Hawaii
ONE IN 29 HAWAII HOMEOWNERS is expected to                                                           ASSESSMENT: Through 2007, Hawaii’s
                                                                                                     response to its foreclosure challenges had
experience foreclosure by the end of 2010 due to a                                                   been limited to laws protecting seniors from
high-cost loan—exceeding the U.S. average of one in                                                  mortgage fraud. In spring 2008, the state
                                                                                                     broadened the reach of those laws to
33 homeowners. The ripple effects of those                                                           prevent foreclosure rescue scams across the
foreclosures are projected to hit more than half of                                                  state. Hawaii has yet to expand its laws
                                                                                                     preventing high-cost lending abuse for
Hawaii’s homeowners and cost more than $4 billion in                                                 future borrowers, however.
                                                                                                                                     *As of December 2008
lost property value.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 29 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    19 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    54 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $24,768 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $4.16 billion is projected to be lost from the combined                                              consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                       Idaho
ONE IN 39 IDAHO HOMEOWNERS is likely to experience                                                   ASSESSMENT: Idaho took some steps
                                                                                                     early in 2008 to begin to respond to its
foreclosure by the end of 2010 due to a high-cost                                                    foreclosure challenges. It joined many states
loan—just slightly better than the U.S. average of one                                               in taking advantage of the National
                                                                                                     Foreclosure Mitigation Counseling grant to
in 33 homeowners. Twenty-two percent of mortgages                                                    offer counseling to distressed homeowners
issued to Idaho homeowners in 2005 and 2006 were                                                     and enacted a law designed to prevent
                                                                                                     foreclosure rescue fraud. However, the state’s
high-cost loans, and these mortgages have led to the                                                 predatory mortgage lending law contains
subprime foreclosure problems the state faces today.                                                 only moderate restrictions on prepayment
                                                                                                     penalties; Idaho hasn’t yet done more to
These likely challenges will require Idaho to contend                                                address future lending problems.
                                                                                                                                     *As of December 2008
with problems for years to come, as almost one third of
all homeowners are projected to have their property
values affected by the state’s foreclosures.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 39 homeowners is projected to experience foreclosure
    on their home as a result of their high cost-loan                                                    State-funded refinance program

                                                                                                         Loan modification
    22 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    31 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,136 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $304 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                      Illinois
ONE IN 38 ILLINOIS HOMEOWNERS is likely to                                                           ASSESSMENT: Illinois policy makers
                                                                                                     began moving forward years ago on a
experience foreclosure by the end of 2010 as a result
                                                                                                     consumer protection agenda that has
of high-cost loans—just slightly better than the U.S.                                                developed into one of the nation’s
                                                                                                     strongest responses to the foreclosure
average of one in 33 homeowners. The state’s
                                                                                                     crisis. In 2008 lawmakers approved
subprime foreclosure crisis threatens to affect the                                                  measures to offer a pool of money to
                                                                                                     refinance loans, to protect homeowners
property values of over 60 percent of Illinois’
                                                                                                     against foreclosure rescue scams and to
homeowners—a higher proportion of spillover effect                                                   guard against predatory lending. Its
than in all but five states.                                                                         legislative efforts are complemented by
                                                                                                     consumer counseling and a state
                                                                                                     foreclosure task force.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 38 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    29 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    61 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $10,760 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $27.3 billion is projected to be lost from the combined                                              consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                               Indiana
ONE IN 37 INDIANA HOMEOWNERS is projected to be                                                      ASSESSMENT: Indiana has worked
                                                                                                     more quickly than many states on a broad
in foreclosure by the end of 2010 as a result of                                                     agenda to address its foreclosure problems.
subprime loans—just slightly better than the U.S.                                                    Fortunate to already have a stronger
                                                                                                     predatory lending law in effect than many
average of one in 33 homeowners. This forecast                                                       states, Indiana more recently has reached
compounds Indiana’s difficult economic conditions                                                    out to vulnerable homeowners through a
                                                                                                     media campaign and a counseling hotline.
common to the Rust Belt states—where weakness in                                                     The state has sought to protect
the manufacturing sector has led to significant job loss.                                            homeowners through a law to prevent
                                                                                                     foreclosure rescue scams and a mandate
Subprime foreclosures will also likely worsen the state’s                                            that lenders communicate with borrowers in
                                                                                                     danger of defaulting. A mortgage lending
current housing challenges.
                                                                                                     and fraud prevention task force was
                                                                                                     convened in March 2008.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 37 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    28 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    28 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,760 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $959 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                             Iowa
IOWA’S FORECLOSURE PROBLEM IS LESS SEVERE than                                                       ASSESSMENT: Iowa is fortunate to have
                                                                                                     a strong predatory lending law on the books
that of many other states, but it warrants attention and                                             to help provide some protections for future
action nonetheless as the spread of this national                                                    borrowers by covering a wide range of loans
                                                                                                     and banning prepayment penalties. More
epidemic has proven that no state is immune. Almost                                                  recently, the state has been more active in
one quarter of mortgages issued in Iowa in 2005 and                                                  tackling its current foreclosure challenges
                                                                                                     through counseling for vulnerable
2006 were high-cost loans, and subprime borrowers in                                                 homeowners and a new law designed to
the state have begun to default on their loans as their                                              prevent foreclosure rescue scams.
                                                                                                                                     *As of December 2008
adjustable-rate mortgages have reset higher.
Projections show that nearly 30 percent of all Iowa
homeowners will feel the ripple effects of foreclosures
on neighboring homes—with an average property
value loss of about $1,900.



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 79 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    28 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,930 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $344 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                 Kansas
KANSAS FACES CHALLENGES because of the slowing                                                       ASSESSMENT: As of October 2008,
                                                                                                     Kansas had not moved to help its vulnerable
housing market and subprime mortgage defaults. One                                                   homeowners, more than 9,600 of whom
in 53 Kansas homeowners is estimated to face                                                         could face foreclosure, by the end of 2010.
                                                                                                     A comprehensive high-cost lending law
foreclosure by the end of 2010 because of subprime                                                   provides some protection for borrowers, but
loans. That is better than the U.S. average of one in                                                the state has not yet taken additional action
                                                                                                     against the current foreclosure trend,
33 homeowners. Still, nearly one third of the state’s                                                whether through communication with
home values are threatened by projected neighboring                                                  homeowners, new legislation or
                                                                                                     partnerships with the private sector.
foreclosures, and property values may drop by an                                                                                     *As of December 2008

estimated $1,900 on average.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 53 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    24 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    30 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,908 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $382 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                     Kentucky
ONE QUARTER OF ALL KENTUCKY HOMEOWNERS                                                               ASSESSMENT: Kentucky can expect less
                                                                                                     severe impacts from the foreclosure crisis
could feel the ripple effects of the 21,000 homeowners                                               than many other states, but it has taken a
expected to default by the end of 2010 on high-cost                                                  number of steps to better protect both
                                                                                                     current and future borrowers. The Kentucky
loans that originated in 2005 and 2006. Neighbors of                                                 Residential Mortgage Fraud Act, enacted in
foreclosed properties are at risk of losing an average of                                            April 2008, aims to reduce predatory
                                                                                                     lending and mortgage fraud and increase
nearly $2,000 in home value. More broadly, the crisis                                                consumer protection. The state has also
could cost the state and its localities almost $500                                                  created the Kentucky Homeownership
                                                                                                     Protection Center, a centralized location for
million from their tax bases.                                                                        information for homeowners in danger of
                                                                                                     defaulting on their mortgages.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 55 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    25 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    26 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,993 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $498 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                     Louisiana
WHILE HURRICANE KATRINA PARTIALLY CAUSED                                                             ASSESSMENT: Louisiana has few protec-
                                                                                                     tions in place to guard against future high-
LOUISIANA’S FORECLOSURE CHALLENGES, subprime
                                                                                                     cost lending, assist vulnerable homeowners
lending has intensified the problem. One in 41                                                       or prevent foreclosure rescue scams. The
                                                                                                     state does require the licensing of mortgage
homeowners is projected to foreclose on their home by                                                brokers and supervises some of their activi-
the end of 2010 as a result of high-cost loans—just                                                  ties, and in June 2008 enacted a law to
                                                                                                     begin offering counseling to homeowners in
slightly better than the U.S. average of one in 33                                                   danger of default.
                                                                                                                                     *As of December 2008
homeowners. The state’s subprime foreclosure
challenges are projected to have ripple effects on close
to a third of all Louisiana homeowners and cost the state
and its localities a collective $1 billion from the tax base.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 41 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    31 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    29 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,578 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $1 billion is projected to be lost from the combined state                                           consumer interests
    and local tax base                                                                                                = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                      Maine
MAINE, LIKE ALL STATES, HAS WITNESSED A RISE in the                                                  ASSESSMENT: Maine has augmented
                                                                                                     its strong high-cost lending laws and
number of foreclosures from subprime loans and most                                                  regulations with efforts to assist citizens who
likely will experience a further increase. In fact, one in 60                                        are already in homes facing foreclosure. An
                                                                                                     April 2008 law shields homeowners from
Maine homeowners is projected to face foreclosure                                                    rescue scams, while a counseling program
because of a high-cost loan (compared to the U.S.                                                    keeps them apprised of their options. This
                                                                                                     may help mitigate damage from
average of one in 33 homeowners). More than 10                                                       foreclosures and prevent further reductions
percent of the state’s homeowners will likely experience                                             in the state and local tax base, which is
                                                                                                     predicted to drop by $134 million by the
the ripple effects of subprime-related foreclosures on                                               end of 2010.
                                                                                                                                     *As of December 2008
their property values.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 60 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    22 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    12 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,189 on
                                                                                                         High-cost lending laws
    average in property value                                                            Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $134 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                     Maryland
ONE IN 26 MARYLAND HOMEOWNERS is likely to                                                           ASSESSMENT: Maryland has acted
                                                                                                     aggressively to address its foreclosure crisis.
experience foreclosure in the coming years—                                                          In April 2008, Governor Martin O’Malley
exceeding the U.S. average of one in 33. Maryland’s                                                  signed into law some of the country’s most
                                                                                                     sweeping reforms, providing immediate
significant foreclosure challenges are related largely                                               help to homeowners while strengthening
                                                                                                     the state’s oversight of the mortgage
to the high proportion of subprime mortgages
                                                                                                     industry. The state extended the foreclosure
issued in the state in 2005 and 2006. As initial                                                     process from 15 to 150 days, criminalized
                                                                                                     mortgage fraud, banned prepayment
adjustable-rate mortgages have adjusted upward                                                       penalties and sought to prevent deceptive
and housing growth has stalled, increasing numbers                                                   foreclosure rescue transactions. Lenders are
                                                                                                     now required to wait 90 days after default
of Maryland homeowners are defaulting on their                                                       before filing the foreclosure action, and
loans. Projections show that by the end of 2010,                                                     must provide notice to the homeowner 45
                                                                                                     days before filing. A “right to cure”
over 60 percent of the state’s homeowners could be                                                   provision ensures that homeowners are able
                                                                                                     to stop foreclosure by paying what is owed
negatively affected by subprime foreclosures.
                                                                                                     until the day before the sale.
                                                                                                                                     *As of December 2008



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                 STATUS*
    1 in 26 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    29 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    61 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $9,941 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $12 billion is projected to be lost from the combined state                                          consumer interests
    and local tax base                                                                                                 = action taken        = no action taken

                                                                                                                                        *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                           Massachusetts
ONE IN 48 MASSACHUSETTS HOMEOWNERS is likely to                                                      ASSESSMENT: Massachusetts faces
                                                                                                     considerable challenges, but has put policies
experience foreclosure by the end of 2010 as a result of                                             in place in an effort to mitigate the negative
                                                                                                     impacts of the subprime-driven foreclosure
high-cost loans made in 2005 and 2006. That is a better                                              crisis. The state pledged $250 million for a
                                                                                                     loan fund to help homeowners refinance
rate than the U.S. average of one in 33 homeowners.
                                                                                                     unmanageable loans, and provides borrowers
One in four Massachusetts homeowners is likely to feel                                               in default 90 days to work with their mortgage
                                                                                                     servicers to try to avoid foreclosure. A $20
the ripple effects—with an average property value loss                                               million low-interest loan fund fights
                                                                                                     neighborhood foreclosure-related blight by
of about $8,000. And $8 billion is projected to be lost                                              helping developers quickly prepare properties
                                                                                                     for sale or rental. Massachusetts has taken
from the combined state and local tax base.                                                          steps to expand coverage under its high-cost
                                                                                                     lending law and enacted measures to better
                                                                                                     align mortgage brokers’ practices with
                                                                                                     consumer interests, including verification of
                                                                                                     the borrower’s ability to repay the loan. The
                                                                                                     state’s Division of Banks has begun assessing
                                                                                                     licensed mortgage lenders on how quickly
                                                                                                     and often they modify loans for delinquent
                                                                                                     borrowers looking for state assistance.
                                                                                                                                     *As of December 2008


        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 48 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    20 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    39 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $7,885 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $8 billion is projected to be lost from the combined state                                           consumer interests
    and local tax base                                                                                                = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                         Michigan
ONE IN 36 MICHIGAN HOMEOWNERS is likely to end up in                                                 ASSESSMENT: Michigan should be
                                                                                                     commended for taking action to curb
foreclosure as a result of subprime loans made in 2005                                               foreclosures while also working to solve
and 2006, only slightly better than the U.S. average of one                                          more structural economic issues. The state’s
                                                                                                     predatory lending law bans prepayment
in 33 homeowners. Nearly one third of all mortgages                                                  penalties, and in April 2008 Governor
issued in Michigan in 2005 and 2006 were high-cost loans;                                            Jennifer Granholm signed into law “Save the
                                                                                                     Dream” legislation aimed at helping
the expected foreclosures as a result of those loans could                                           homeowners obtain more affordable loans or
decrease the value of 43 percent of the state’s homes.                                               refinance their adjustable-rate mortgages
                                                                                                     with the help of the Michigan Housing
These projected foreclosures and their ripple effects will                                           Development Authority. Governor Granholm
                                                                                                     also signed legislation designed to prevent
likely add to the challenges Michigan already faces—it
                                                                                                     mortgage fraud.
began suffering through a depressed economy long                                                                                     *As of December 2008

before a recession became a national fear. Battered by
massive manufacturing job losses, the state now faces a
growing foreclosure challenge.

        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 36 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    30 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    43 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,685 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $3.8 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                               Minnesota
MINNESOTA’S FORECLOSURE PROBLEMS ARE                                                                 ASSESSMENT: Minnesota has
                                                                                                     responded to its foreclosure challenges
GROWING. One in 40 homeowners is likely to foreclose                                                 more quickly than some other states with
on their home by the end of 2010 as a result of high-                                                similar subprime foreclosure situations,
                                                                                                     providing direct financial assistance to
cost loans. That’s a better rate than the U.S. average of                                            homeowners facing default. State officials
                                                                                                     have sought to address the interests of
one in 33 homeowners. Still, nearly one quarter of all                                               various stakeholders, including
mortgages issued in Minnesota in 2005 and 2006 were                                                  homeowners in danger of foreclosure and
                                                                                                     future borrowers. High-cost lending laws
subprime loans, and expected defaults on those loans                                                 have been strengthened and are
                                                                                                     complemented by provisions to align
threaten to drag down the home values of 39 percent                                                  mortgage broker practices with borrowers’
of the state’s homeowners.                                                                           interests. The state received a $4.3 million
                                                                                                     federal grant to support mortgage
                                                                                                     counseling, and has expanded its
                                                                                                     counseling workshops. Steps are
                                                                                                     underway to revitalize foreclosed
                                                                                                     properties to mitigate damage to
                                                                                                     surrounding neighborhoods.
                                                                                                                                     *As of December 2008



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 40 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    39 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $4,129 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $2.3 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                              Mississippi
MISSISSIPPI RANKS AS THE STATE WITH THE GREATEST                                                     ASSESSMENT: Mississippi has taken
                                                                                                     limited action to protect borrowers and to
PROPORTION OF SUBPRIME MORTGAGES issued in
                                                                                                     reach out to homeowners facing
2005 and 2006. More than one in three loans were                                                     foreclosure. Officials have succeeded in
                                                                                                     implementing a new law to reduce
subprime, a fact that is projected to result in one                                                  mortgage fraud, and consumer counseling
foreclosure per 49 homeowners by the end of 2010.                                                    is available. However, as of October 2008,
                                                                                                     the state had not adopted many of the
That is better than the U.S. average of one in 33                                                    practices considered promising by other
homeowners. Still, nearly one in six Mississippi                                                     states. To date, only counseling is available
                                                                                                     for homeowners facing foreclosure.
homeowners will be negatively affected by the ripple                                                                                 *As of December 2008

effects of nearby foreclosures; their homes’ values
could decline by more than $1,800 each.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 49 homeowners are projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    36 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    16 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,860 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $144 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                          Missouri
ONE IN 38 MISSOURI HOMEOWNERS is likely to                                                           ASSESSMENT: The state passed laws in
                                                                                                     2007 and 2008 aimed at preventing
experience foreclosure on their home as a result of                                                  foreclosure rescue fraud—steps in the right
subprime loans made in 2005 and 2006. Although that                                                  direction. Counseling services, including a
                                                                                                     foreclosure hotline, are available for
statistic places Missouri in the middle of the pack in                                               distressed homeowners—but the state has
terms of foreclosure rates—the U.S. average is one in                                                done little else to directly assist at-risk and
                                                                                                     potential homeowners. The state should
33 homeowners—the ripple effects from the state’s                                                    consider implementing high-cost lending
foreclosures will likely cause a decrease in the property                                            laws, among other actions.
                                                                                                                                     *As of December 2008
values of two in five Missouri homeowners.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                 STATUS*
    1 in 38 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    30 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    41 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,540 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $1.8 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                           = action taken        = no action taken

                                                                                                                                        *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                         Montana
COMPARED TO MANY OTHER STATES, Montana has a                                                         ASSESSMENT: Montana—similar to its
                                                                                                     neighboring states, South Dakota, North
relatively low proportion of subprime loans. That does                                               Dakota and Wyoming, that also have
not mean the state is immune to problems resulting                                                   lower rates of foreclosure compared with
                                                                                                     the national average—has not acted to
from foreclosures, though. Projections show that one in                                              prevent problematic high-cost loans. The
81 Montana homeowners will face foreclosure by the                                                   state does provide some assistance to
                                                                                                     residents who have already entered the
end of 2010 because of subprime loans. The ripple                                                    foreclosure process, however. The
effects could cause the state’s homeowners to lose                                                   Montana Board of Housing helps fund the
                                                                                                     Montana HomeOwnership Center,
about $2,500 on average in property values and a $42                                                 composed of state and local government
                                                                                                     and nonprofit agencies offering
million drop in the state and local tax base.
                                                                                                     counseling, foreclosure intervention loan
                                                                                                     funds and a refinance program.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 81 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    18 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    12 percent of all homes in the state will likely feel the
                                                                                                         Counseling available
    ripple effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,526 on
                                                                                                         High-cost lending laws
    average in property value                                                            Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $42 million is projected to be lost from the combined                                                consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                    Nebraska
DESPITE NEBRASKA’S RELATIVELY LOW RATE OF                                                            ASSESSMENT: A law aimed at
                                                                                                     preventing rescue scams was put in place in
FORECLOSURES TO DATE, the state has challenges
                                                                                                     March 2008, and financial counseling is
ahead. As adjustable mortgage rates reset higher, more                                               available for distressed homeowners. But
                                                                                                     despite projections that more than one
subprime borrowers will fall into foreclosure, and those                                             third of the state’s homeowners will feel the
defaults will likely lead to a decline in property values                                            economic ripple effects of neighboring
                                                                                                     subprime-related foreclosures, Nebraska
for more than one third of Nebraska’s homeowners.                                                    has taken little action to stem foreclosures.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 64 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    35 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are projected to lose $1,884 on
                                                                                                         High-cost lending laws
    average in property value                                                            Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $250 million is projected to be lost in the combined state                                           consumer interests
    and local tax base                                                                                                = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                            Nevada
WITH ONE IN 11 HOMEOWNERS estimated to                                                               ASSESSMENT: Nevada has started to
                                                                                                     move in the right direction, and in 2007 the
experience foreclosure on their home by the end of                                                   state established laws to combat both high-
2010, Nevada leads the U.S. with the highest number                                                  cost loans and rescue scams. It also offers
                                                                                                     counseling services for distressed
of projected foreclosures per homeowner resulting                                                    homeowners. While Nevada’s recent actions
from subprime loans made in 2005 and 2006.                                                           demonstrate it is beginning to understand
                                                                                                     the magnitude of its problem, the state has
Subprime lending mixed with affordable housing                                                       taken less action than many others with less
prices to drive Nevada’s recent housing boom and is                                                  severe foreclosure challenges.
                                                                                                                                     *As of December 2008
now propelling the state’s foreclosure crisis. The
spillover effects of Nevada’s subprime foreclosures will
likely cause a decrease in property value for three
fourths of the state’s homeowners—a rate that is
second only to Washington, D.C.



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 11 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    29 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    77 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $11,730 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $6.5 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                    New Hampshire
CLOSE TO 20 PERCENT of all loans made in New                                                         ASSESSMENT: New Hampshire policy
                                                                                                     makers have begun to turn their attention
Hampshire in 2005 and 2006 were subprime. As a                                                       to the foreclosure problems facing their
result, an estimated one in 49 homeowners in the state                                               state. In 2007, the state established the
                                                                                                     Foreclosure Consultant Practices Act to
will face foreclosure by the end of 2010. That is better                                             protect homeowners against rescue fraud.
than the U.S. average of one in 33 homeowners. Still,                                                State officials should continue to consider
                                                                                                     options that could prevent future high-cost
New Hampshire residents will feel significant ripple                                                 lending abuses and protect homeowners in
effects of the state’s foreclosure challenges. Almost                                                danger of default.
                                                                                                                                     *As of December 2008
one in five homes in the state is projected to
depreciate in value by an average of about $3,500 as a
result of nearby foreclosures.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 49 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    19 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    19 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,524 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $203 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                        New Jersey
ONE IN 37 NEW JERSEY HOMEOWNERS is projected to                                                      ASSESSMENT: New Jersey has taken
                                                                                                     some promising steps to try to address its
face foreclosure by the end of 2010 as a result of                                                   foreclosure problems. New Jersey’s 2002
subprime loans made in 2005 and 2006—just slightly                                                   Home Ownership Security Act stands out as
                                                                                                     one of the most comprehensive high-cost
better than the U.S. average of one in 33 homeowners.                                                lending laws. In 2007, the state set $30
As a result, more than 50 percent of the state’s                                                     million aside for its refinance program.
                                                                                                     Counseling services have also been put in
homeowners will likely experience an average decline                                                 place for distressed homeowners. In
of about $11,000 in their property values resulting                                                  September, the state legislature passed the
                                                                                                     Save New Jersey Homes Act of 2008 to
from nearby foreclosures. The accumulated cost to the                                                offer more disclosure to borrowers about
                                                                                                     resets and the option to extend their first
state and local tax base could be almost $20 billion.
                                                                                                     interest rate for three years.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 37 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    24 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    54 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $10,987 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $19.6 billion is projected to be lost from the combined                                              consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                    New Mexico
NEW MEXICO HAS NOT BEEN AS HARD HIT BY THE                                                           ASSESSMENT: New Mexico policy
                                                                                                     makers have taken positive steps to try
FORECLOSURE CRISIS AS SOME OF ITS NEIGHBORS,
                                                                                                     to mitigate the state’s escalating foreclosure
but its problems are mounting. Foreclosures are                                                      problem. The state has established
                                                                                                     comprehensive high-cost lending laws,
expected to grow as subprime borrowers default on
                                                                                                     created a statewide counseling effort and
their loans due to resetting adjustable mortgage                                                     task force, and launched a foreclosure
terms that include higher rates and principal                                                        hotline.
                                                                                                                                     *As of December 2008
payments. Projections show that one in 56 New
Mexico homeowners will face foreclosure by the end
of 2010 because of subprime loans, which will likely
cause a decrease in property values of one third of the
state’s homeowners.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 56 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    33 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,389 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $513 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                   New York
NEW YORK FACES SERIOUS FORECLOSURE                                                                   ASSESSMENT: New York is working to
                                                                                                     align its actions with the size and nature of
PROBLEMS—one in 32 New York homeowners is                                                            its challenges. The state has established
                                                                                                     laws and programs to help curb high-cost
projected to face foreclosure by the end of 2010                                                     lending and to work with homeowners in
because of subprime loans. Foreclosures from                                                         danger of default, and dedicated $25
                                                                                                     million in the 2008-2009 budget to assist
subprime loans made in 2005 and 2006 are projected                                                   homeowners facing foreclosure. Through
                                                                                                     the Subprime Mortgage Foreclosure
to reduce the property values of more than half of the                                               Prevention Services Program, the state is
                                                                                                     providing funding and training for not-for-
state’s homeowners by an average of $18,000, and the
                                                                                                     profits to provide financial counseling and
combined state and local tax base could lose $65                                                     legal services to distressed homeowners.
                                                                                                     The state also has laws to combat rescue
billion.                                                                                             scams and in 2007 created the Keep the
                                                                                                     Dream refinance program, equipped with
                                                                                                     $100 million to help homeowners refinance
                                                                                                     out of high-risk loans. A law put in place in
                                                                                                     August 2008 requires lenders to notify
                                                                                                     borrowers 90 days before foreclosure
                                                                                                     proceedings commence.
                                                                                                                                     *As of December 2008



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 32 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    25 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    52 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $18,334 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $65 billion is projected to be lost from the combined state                                          consumer interests
    and local tax base                                                                                                = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                          North Carolina
BY APRIL 2008, one in 44 North Carolina homeowners                                                   ASSESSMENT: North Carolina has
                                                                                                     taken a number of positive steps to
was projected to experience foreclosure by the end of                                                address its foreclosure challenges. The
2010. The state should expect the share of homeowners                                                state’s abusive lending laws are more
                                                                                                     comprehensive than those of other
defaulting on their loans to rise, however, as greater                                               states—placing strict regulations on
numbers of borrowers who took out subprime loans in                                                  brokers, requiring lenders to verify a
                                                                                                     borrower’s income and assess a borrower’s
2005 and 2006 head toward foreclosure.                                                               ability to repay the loans, and banning
                                                                                                     prepayment penalties. The state also
                                                                                                     requires that homeowners be notified
                                                                                                     before foreclosure.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 44 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    14 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,592 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $861 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                              North Dakota
NORTH DAKOTA IS PROJECTED TO HAVE THE LOWEST                                                         ASSESSMENT: Although North
                                                                                                     Dakota’s foreclosure problems are much
RATE OF FORECLOSURES from subprime loans of any
                                                                                                     less severe than those happening in other
state in the country. The subprime-related                                                           states, the state could benefit from
                                                                                                     considering high-cost loan laws and other
foreclosures it may experience by the end of 2010,                                                   assistance programs aimed at helping
however, could negatively affect as many as one fifth                                                homeowners who are threatened by
                                                                                                     foreclosure. As of October 2008, North
of the state’s homeowners.                                                                           Dakota had not taken any significant action
                                                                                                     to address foreclosures.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 165 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    18 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    20 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,165 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $51 million is projected to be lost from the combined                                                consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                             Ohio
OHIO IS A STATE EXPERIENCING GREAT PAIN resulting                                                    ASSESSMENT: Ohio is among the states
                                                                                                     battling the most severe economic
from the national foreclosure crisis, with one in 37                                                 challenges, and among the leaders in
homeowners estimated to experience foreclosure on                                                    aggressively trying to address the foreclosure
                                                                                                     crisis. Governor Ted Strickland is
their subprime mortgages by the end of 2010—just                                                     spearheading the effort. In early April 2008,
slightly better than the U.S. average of one in 33                                                   he reached agreement with nine mortgage
                                                                                                     servicers on a significant effort to modify the
homeowners. The decline of the state’s economy and                                                   terms of adjustable-rate subprime mortgages
housing market is the primary driver of its foreclosure                                              across the state. In addition, the state has put
                                                                                                     money aside for troubled homeowners and
crisis. And as in other Rust Belt states, high-cost lending                                          coordinated programs to help Ohioans keep
                                                                                                     their homes.
has contributed to the state’s financial woes.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                 STATUS*
    1 in 37 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    27 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    36 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,046 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $2.85 billion is projected to be lost from the combined                                              consumer interests
    state and local tax base                                                                                           = action taken        = no action taken

                                                                                                                                        *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                Oklahoma
ONE THIRD OF ALL MORTGAGES issued in Oklahoma                                                        ASSESSMENT: Oklahoma has
                                                                                                     implemented some programs to try to
in 2005 and 2006 were subprime loans. As a result,                                                   address its foreclosure challenges. Its 2003
one in 47 Oklahoma homeowners is projected to face                                                   Home Ownership and Equity Protection Act
                                                                                                     seeks to curb high-cost lending and the
foreclosure on their homes by the end of 2010. This is                                               state’s counseling service works with current
better than the U.S. average of one in 33                                                            homeowners in danger of foreclosure.
                                                                                                                                     *As of December 2008
homeowners. Still, neighbors of foreclosed properties
may lose on average more than $1,500 in their
property values as a result.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 47 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    32 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    28 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,665 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $427 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                             Oregon
OREGON CAN EXPECT FORECLOSURE CHALLENGES                                                             ASSESSMENT: Oregon has been slow to
                                                                                                     take foreclosure-related action, despite a
AHEAD—one in 34 Oregon homeowners is projected to
                                                                                                     foreclosure rate that is expected to increase
face foreclosure by the end of 2010 as a result of their                                             through 2010. Counseling services are now
                                                                                                     available for distressed homeowners, and a
high-cost loan. Although early on in this crisis Oregon                                              March 2008 measure takes aim at rescue
fared somewhat better than other states, the number of                                               scammers, imposing severe restrictions and
                                                                                                     penalties. Oregon should look to the actions
subprime mortgages issued in the state in 2005 and                                                   of other states that have adopted high-cost
2006 makes it likely that Oregon’s foreclosure rate will                                             lending laws or are negotiating agreements
                                                                                                     with lenders to work with distressed
increase substantially in the next two years.                                                        homeowners, among other measures, in an
                                                                                                     effort to stem its foreclosure challenges.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 34 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    20 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    43 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $5,459 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $2.5 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                   Pennsylvania
ONE IN 46 HOMEOWNERS IN PENNSYLVANIA is                                                              ASSESSMENT: One of the first states to
                                                                                                     launch a foreclosure assistance program in the
projected to experience foreclosure by the end of                                                    1980s, Pennsylvania has augmented that
                                                                                                     program to meet the needs of the current
2010. The frequency with which subprime mortgages                                                    subprime crisis. The program helps qualifying
                                                                                                     Pennsylvania residents entering the foreclosure
were issued in 2005 and 2006 makes it likely that the                                                process with payment assistance and requires
                                                                                                     borrowers to meet with housing counselors. The
state’s foreclosure rate will increase. Pennsylvania is                                              state also has two refinance programs, including
                                                                                                     one that offers 100 percent financing for
projected to lose $6.6 billion from the combined                                                     homeowners who can no longer afford their
                                                                                                     loan; however, unlike a typical refinance
state and local tax base.                                                                            program, the Housing Finance Agency
                                                                                                     purchases the loan from the lender and modifies
                                                                                                     it so the borrower can afford the payments. In
                                                                                                     July 2008, a law was put in place requiring
                                                                                                     lenders to provide notice to delinquent
                                                                                                     mortgage-holders, and provides a 30-day
                                                                                                     reprieve for homeowners to seek assistance and
                                                                                                     meet with lenders in person to resolve the
                                                                                                     delinquency. A combined state-federal task
                                                                                                     force is examining the greater Pittsburg region’s
                                                                                                     foreclosure crisis, but had not extended services
                                                                                                     to the rest of the state as of July 2008.
                                                                                                                                     *As of December 2008


        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 46 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    39 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,907 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $6.6 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                  Rhode Island
RHODE ISLAND IS A SMALL STATE WITH A BIG                                                             ASSESSMENT: Rhode Island has taken
                                                                                                     promising steps to meet its foreclosure
PROBLEM—one in 31 homeowners is projected to face
                                                                                                     challenges. In 2006, Rhode Island enacted
foreclosure by the end of 2010, exceeding the U.S.                                                   the Madeline Walker Act, a comprehensive
                                                                                                     law aimed at helping homeowners in danger
average of one in 33 homeowners. Rhode Island is                                                     of foreclosure. Among other provisions, the
among the states with the highest projected rates of                                                 law requires lenders to notify homeowners if
                                                                                                     they are in danger of foreclosure. The state
foreclosure due to subprime loans. Compounding that                                                  has implemented an act to prevent rescue
problem, more than half of the state’s homeowners                                                    fraud and offers counseling to homeowners
                                                                                                     in danger of default. State legislators also
could lose more than $7,000 on average in property                                                   passed a law requiring counseling for
                                                                                                     homeowners who wish to take out a reverse
values because of neighboring foreclosures.
                                                                                                     mortgage. This law is aimed at protecting
                                                                                                     the state’s elderly population, in particular,
                                                                                                     from predatory lenders.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 31 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    28 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    56 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $7,008 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $1.7 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                          South Carolina
SOUTH CAROLINA HAS EXPERIENCED FORECLOSURE                                                           ASSESSMENT: South Carolina has
                                                                                                     taken promising steps to address its
PROBLEMS similar to its neighbor, North Carolina.
                                                                                                     expected foreclosure challenges. State
Although it expects a lower rate of foreclosures as a                                                lawmakers have approved legislation
                                                                                                     aimed at preventing high-cost loan abuse
result of subprime loans than the national average                                                   and have provided some assistance to
(one in 33 homeowners), South Carolina’s rate is on                                                  homeowners threatened by foreclosure
                                                                                                     with the 2003 High-Cost and Consumer
the rise, with one in 42 homeowners projected to                                                     Home Loans Act and a statewide
default by the end of 2010.                                                                          consumer education campaign. Additional
                                                                                                     programs to aid homeowners already in
                                                                                                     the foreclosure process and those
                                                                                                     projected to enter foreclosure in coming
                                                                                                     years could help lessen the potential
                                                                                                     impact on the state and local tax base.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 42 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    26 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    14 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,660 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $477 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                               South Dakota
SOUTH DAKOTA HAS ONE OF THE LOWEST RATES OF                                                          ASSESSMENT: South Dakota only offers
                                                                                                     counseling services for distressed
FORECLOSURE IN THE NATION—one in 116
                                                                                                     homeowners—no other programs or laws
homeowner is estimated to lose their homes by the                                                    have yet been put in place to address the
                                                                                                     state’s small part of the nation’s foreclosure
end of 2010 compared to the national average of                                                      problem. A significant proportion of the
one in 33. Ripple effects from projected                                                             state’s homeowners are expected to be
                                                                                                     affected by foreclosure in the coming years,
foreclosures from subprime loans, however, could                                                     however, and policy makers could benefit
negatively affect the property value of more than                                                    from considering steps other states have
                                                                                                     taken to address their foreclosure
one in 10 of the state’s homeowners.                                                                 challenges, such as enacting laws to
                                                                                                     prevent high-cost lending.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 116 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    18 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    15 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,000 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $38 million is projected to be lost from the combined                                                consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                Tennessee
IN TENNESSEE, ABOUT ONE THIRD OF ALL LOANS                                                           ASSESSMENT: Tennessee has taken
                                                                                                     some action in the face of its foreclosure
made in 2005 and 2006 were subprime mortgages.                                                       problems, including an April 2008
One in 36 Tennessee homeowners is projected to face                                                  requirement that mortgage lenders attend
                                                                                                     training. The state enacted some consumer
foreclosure by the end of 2010 because of subprime                                                   protection measures with the 2006 Home
loans—only slightly better than the national average of                                              Loan Protection Act, which regulates high-
                                                                                                     cost loans, and the federal government
one in 33 homeowners. Foreclosures stemming from                                                     recently provided the Tennessee Housing
high-cost loans will likely negatively affect one quarter                                            Development Agency with a $1.3 million
                                                                                                     grant to fund foreclosure prevention. The
of the state’s homeowners—and could cause the state                                                  state lags behind other states, however, in
                                                                                                     doing more to protect distressed
and local tax base to lose nearly $1 billion.
                                                                                                     homeowners, such as creating a refinance
                                                                                                     or loan modification program.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 36 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    32 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    25 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,190 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $967 million is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                        Texas
ONE IN 35 TEXAS HOMEOWNERS will likely experience                                                    ASSESSMENT: In 2002, Texas lawmakers
                                                                                                     passed the High-Cost Home Loan Law,
foreclosure by the end of 2010. This is largely due to the                                           regulating high-cost loans and advocating
substantial proportion of subprime mortgages issued in                                               consumer counseling. The state’s
                                                                                                     Department of Housing and Community
Texas in 2005 and 2006—34 percent of all loans—which                                                 Affairs recently launched a Foreclosure
was second only to Mississippi. The cumulative loss of                                               Prevention Training program offered to
                                                                                                     housing, social service, counseling and local
property value resulting from projected foreclosures                                                 government agencies in partnership with
may reach nearly $5 billion statewide.                                                               NeighborWorks America, a nonprofit that
                                                                                                     seeks to create affordable housing
                                                                                                     opportunities and provides other assistance.
                                                                                                     Criminal penalties have been put in place to
                                                                                                     prevent mortgage fraud, and a task force is
                                                                                                     taking a comprehensive look at how the
                                                                                                     state can stem the tide of foreclosures.

                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 35 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    34 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    33 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,156 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $4.9 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                               United States
PROJECTIONS SHOW THAT ONE IN 33 CURRENT U.S.                                                         ASSESSMENT: Homeownership is not
                                                                                                     only the primary vehicle through which
HOMEOWNERS could face foreclosure by the end of 2010
                                                                                                     American families build financial security—
because of subprime loans. Almost a year after states and                                            it’s also an essential building block of our
                                                                                                     national economy. Federal and state
consumer advocates called for federal action, Congress
                                                                                                     lawmakers play an important role in
responded to the country’s growing foreclosure epidemic with the                                     addressing this crisis. States were the first
Housing and Economic Recovery Act of 2008, signed into                                               to act, but in July 2008, federal legislators
                                                                                                     put in place a bill that created loan
law July 30. On July 14, 2008, the Federal Reserve Board                                             regulations and limits, allocated $4 billion
strengthened the Truth in Lending Act to include common sense                                        for states to redevelop abandoned and
                                                                                                     foreclosed properties and affected
underwriting standards, including verifying the borrower’s ability                                   neighborhoods, and designated $300
to repay the loan, verifying the borrower’s income, banning pre-                                     billion for homeowners in danger of
                                                                                                     foreclosure to refinance into affordable
payment penalties on loans that can change in the first four years,                                  FHA loans. The bill also expanded
and requiring creditors to establish escrow accounts to account                                      foreclosure mitigation counseling efforts.
                                                                                                     This legislation also encouraged states to
for insurance and property taxes on all first-lien mortgages.
                                                                                                     participate in a national licensing process
                                                                                                     for the mortgage industry.
                                                                                                                                     *As of December 2008



        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 33 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    26 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    43.5 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected lose $8,771 on
                                                                                                         High-cost lending laws
    average from property values                                                         Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    The U.S. is projected to lose $356 billion from its state and                                        consumer interests
    local tax base                                                                                                    = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                                             Utah
WITH ONE IN 25 HOMEOWNERS PROJECTED TO ENTER                                                         ASSESSMENT: Utah implemented its
                                                                                                     High-Cost Home Loan Act in 2004 to help
FORECLOSURE by the end of 2010—exceeding the
                                                                                                     curb high-cost lending, but has not
U.S. average of one in 33 homeowners—Utah’s                                                          otherwise taken significant steps to address
                                                                                                     its expected high foreclosure rate. Although
challenges are immediate. The projection ranks Utah                                                  legislation passed in March 2008 will help
among the top five states with the greatest rates of                                                 prevent rescue scams, Utah lags behind
                                                                                                     other states that have taken action to help
anticipated subprime foreclosures per homeowner.                                                     homeowners who have already entered the
Such defaults could drive down the property values of                                                foreclosure process, such as creating a loan
                                                                                                     modification or refinance program.
47 percent of the state’s homeowners.                                                                                                *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 25 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    24 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    47 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $4,243 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $1.3 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                         Vermont
VERMONT IS LIKELY TO BE ONE OF THE STATES LEAST                                                      ASSESSMENT: Vermont’s lawmakers
                                                                                                     have established a lending law that
AFFECTED. The state’s projected rate of foreclosures
                                                                                                     regulates brokers’ actions and protects
resulting from subprime loans—one in 86                                                              consumers’ interests; however, it is not
                                                                                                     classified as a high-cost lending law. The
homeowners by the end of 2010—is among the                                                           state has not taken steps to help
lowest nationwide, as is the proportion (8 percent)                                                  homeowners who are entering foreclosure,
                                                                                                     though it has begun providing counseling
of the state’s homeowners who may feel the ripple                                                    services. Although the state is among
effects of those defaults.                                                                           those expecting fewer than average
                                                                                                     foreclosures, it is not entirely insulated
                                                                                                     from the national crisis and should
                                                                                                     consider practices other states have
                                                                                                     adopted aimed at helping current
                                                                                                     homeowners avoid foreclosure, such as
                                                                                                     implementing a high-cost lending law.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 86 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    14 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    8 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,364 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $22 million is projected to be lost from the combined                                                consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                             Virginia
WITH ONE IN 33 HOMEOWNERS expected to                                                                ASSESSMENT: Virginia has responded
                                                                                                     to its foreclosure challenge by giving
experience foreclosure by the end of 2010—identical                                                  homeowners with high-risk mortgages a
to the national average—Virginia has immediate                                                       30-day reprieve from foreclosure, and by
                                                                                                     requiring high-risk lenders to provide
challenges. As many as 43 percent of the state’s                                                     homeowners a notice that their loan will
homeowners could be negatively affected by                                                           accelerate 10 days in advance. The state
                                                                                                     has also taken steps to help homeowners
neighboring defaults, with each losing almost $7,000 in                                              avoid foreclosure by preventing mortgage
property value—a potential collective loss of close to                                               scams and providing counseling services.
                                                                                                     No action has been taken, however, to pre-
$7 billion in the state and local tax base across Virginia.                                          empt high-cost lending.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 33 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    43 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $6,712 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $6.95 billion is projected to be lost from the combined                                              consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                        Washington
PROJECTIONS SHOW THAT ONE IN 39 WASHINGTON                                                           ASSESSMENT: Acting on
                                                                                                     recommendations from the governor’s
HOMEOWNERS WILL FACE FORECLOSURE by the end
                                                                                                     homeownership security task force,
of 2010, as a result of subprime loans made in 2005                                                  Washington has put in place laws pre-
                                                                                                     empting high-cost lending and aligning
and 2006—somewhat better than the national average                                                   mortgage brokers’ and consumers’
of one in 33. But even more trouble is looming for                                                   interests. The Smart Homeownership
                                                                                                     Choices program assists low-income and
Washington state. These foreclosures could affect 40                                                 moderate-income households facing
percent of the state’s homeowners, who could lose                                                    foreclosure by helping them bring their
                                                                                                     mortgage payments current, enabling them
close an average of $6,000 in property value.                                                        to refinance into a different loan.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 39 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    21 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    40 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $5,780 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $4.9 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                West Virginia
ALTHOUGH WEST VIRGINIA HAS ONE OF THE LOWEST                                                         ASSESSMENT: West Virginia has taken
                                                                                                     actions that states with more severe
PROJECTED RATES OF FORECLOSURE from subprime
                                                                                                     problems have yet to consider. The state
loans in the nation—one in 89 homeowners may lose                                                    enacted comprehensive laws regulating
                                                                                                     high-cost lending and requires that
their home in the coming years, compared to the                                                      homeowners be notified before they enter
national average of one in 33—the state’s rate is likely                                             the foreclosure process. The state’s high-cost
                                                                                                     lending statute is particularly strong and
to increase through 2010. Almost one in 10 of the                                                    covers a broad assortment of mortgage
state’s homeowners could be negatively affected by                                                   loans, limits fees, requires counseling, bans
                                                                                                     prepayment penalties and provides
the defaults, losing on average almost $2,000 in                                                     remedies for violations.
                                                                                                                                     *As of December 2008
property value.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 89 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    9 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $1,960 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $80 million is projected to be lost from the combined                                                consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                  Wisconsin
WISCONSIN’S FORECLOSURE CHALLENGES, although                                                         ASSESSMENT: Wisconsin has taken
                                                                                                     action to address some of its problems. The
less severe than those in many other states, are likely to                                           state has both high-cost lending laws, to
worsen as a result of subprime loans made in 2005 and                                                help prevent risky loans from being made,
                                                                                                     and a consumer hotline, to work with
2006. One in 60 Wisconsin homeowners is estimated to                                                 owners who have already entered the
be in foreclosure by the end of 2010. That is better than                                            foreclosure process. But it lags behind other
                                                                                                     states in providing homeowners with
the projected U.S. average of one in 33 homeowners.                                                  assistance at different stages of the
Still, Wisconsin’s anticipated foreclosures are expected                                             foreclosure process, such as creating a
                                                                                                     refinance or loan modification program.
to negatively affect more than one third of the state’s                                                                              *As of December 2008

homeowners and their property values.




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 60 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    23 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    35 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $3,410 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $1.9 billion is projected to be lost from the combined                                               consumer interests
    state and local tax base                                                                                          = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org
                                                                                            Defaulting on the Dream:
                                                                         States Respond to America’s Foreclosure Crisis


                                                                                                    Wyoming
WYOMING’S FORECLOSURE PROBLEMS ARE NOT                                                               ASSESSMENT: Wyoming took its first
                                                                                                     step toward curbing high-cost lending in
ESPECIALLY SEVERE COMPARED TO MANY OTHER
                                                                                                     March 2008, requiring national criminal
STATES. However, the state’s foreclosures do threaten                                                background checks on mortgage brokers
                                                                                                     and lenders seeking licenses to do business
to have a ripple effect on a significant proportion of                                               in the state. Still, Wyoming has not
the state’s homeowners. About a third of Wyoming’s                                                   implemented any programs to help its
                                                                                                     homeowners in the foreclosure process.
homeowners could be negatively affected by nearby                                                    Although its projected foreclosure rate of
foreclosures projected to occur in the next two years,                                               one in 64 homeowners is lower than the U.S.
                                                                                                     average of one in 33, many residents could
including average property value declines of almost                                                  be negatively affected by foreclosure.
                                                                                                     Wyoming lags behind other states that have
$2,500 each.
                                                                                                     taken steps to protect future borrowers and
                                                                                                     current homeowners, such as enacting a law
                                                                                                     to prevent high-cost lending or creating a
                                                                                                     loan modification or refinance program.
                                                                                                                                     *As of December 2008




        THE FACTS: The ripple effects of the foreclosure crisis                        THE RESPONSE: Preserving a piece of the dream
                                                                                        GOALS            ACTIONS                                STATUS*
    1 in 64 homeowners is projected to experience foreclosure
    on their home as a result of their high-cost loan                                                    State-funded refinance program

                                                                                                         Loan modification
    24 percent of all loans made in 2005-2006 were subprime                     Avoiding foreclosure
                                                                                                         Preventing rescue scams/
                                                                                                         Mortgage fraud
    29 percent of all homeowners will likely feel the ripple
                                                                                                         Counseling available
    effects of foreclosures from subprime loans
                                                                                  Using all your tools   Task force
    Affected homeowners are expected to lose $2,470 on
                                                                                                         High-cost lending laws
    average in property values                                                           Pre-empting
                                                                                    high-cost lending    Aligns mortgage broker to
    $46 million is projected be lost from the combined state                                             consumer interests
    and local tax base                                                                                                = action taken        = no action taken

                                                                                                                                       *As of October 1, 2008




THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on
foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see
Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.



                                   The Pew Charitable Trusts applies the power of knowledge to solve today’s most challenging problems. Our Pew
                                   Center on the States identifies and advances effective policy approaches to critical issues facing states.
                                   901 E Street, NW | Washington, DC 20004 | www.pewtrusts.org

				
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