Publications

Central Banker | Winter 2007

How Can Bankers Help Customers through Subprime Mess?

Many consumers who bought a subprime mortgage may now be finding themselves in a world of hurt. They may be realizing that they really couldn't afford to buy that home and shouldn't have refinanced to get the money to pay down credit card debt. Furthermore, they may lose their house if their adjustable rate mortgage goes up.

As an Eighth District banker, how can you help? Use the following resources with your customers:

The Board of Governors offers a web site with resources on dealing with-and avoiding-foreclosure at www.federalreserve.gov/pubs/foreclosure/default.htm.
The Fed also created a consumer-oriented site that focuses on general mortgage resources at www.federalreserveconsumerhelp.gov/index.cfm?nav=9493.
Refer a homeowner suddenly facing foreclosure to 1-888-995-HOPE, a hotline run by a partnership between the Homeownership Preservation Foundation and NeighborWorks America. Read more at www.995hope.org.

In addition, federal and state regulators are working together to conduct targeted consumer-protection compliance reviews of selected nondepository lenders with significant subprime mortgage operations. The pilot project is designed to help improve supervision of subprime mortgage lenders.