Illinois homeowners facing foreclosure have a new ally in the fight to keep their homes. The Illinois Homeowner Assistance Initiative offers help through two components: The Illinois Statewide Foreclosure Prevention Network and the Homeowner Assistance Pool.
The foreclosure prevention network provides counseling to homeowners on the verge of foreclosure about how to negotiate with their lenders. The network also reports fraud and deceptive practices.
The Homeowner Assistance Pool is a $200 million effort funded by four mortgage lenders—Chicago Bancorp, Guaranteed Rate, Perl Mortgage and Professional Mortgage Partners. It will be used to finance new, fixed-rate mortgages for homeowners facing adjustments to adjustable rate mortgages or for those who cannot afford their fixed-rate mortgages due to a high interest rate.
The new loans will be 30-year, fixed-rate mortgages with interest rates between 5.75 percent and 8 percent. The maximum loan will be $417,000, covering up to 100 percent of the value of the home. In addition, participating lenders agreed to limit their fees to $1,000 or less.
The program is available to all Illinois homeowners and does not have a maximum income requirement. However, participants must have a credit score of at least 580 and agree to attend mortgage counseling through the Illinois Statewide Foreclosure Prevention Network.
Funded by a grant from the Illinois Housing Development Agency and with support from NeighborWorks America, The Illinois Statewide Foreclosure Prevention Network is a coalition of 15 nonprofit counseling agencies.
In addition, Illinois consumers who call the national toll-free hotline, 1-888-995-HOPE (1-888-995-4673), will receive counseling over the phone and, if necessary, a referral to a counseling agency for further assistance.
A DVD on the perils of payday loans is available from the Arkansans Against Abusive Payday Lending (AAAPL) coalition.
The DVD was completed in cooperation with the Center for Responsible Lending and highlights the stories of borrowers whose financial situations were further exacerbated by their patronage of payday lenders. The 10-minute video is a quick educational resource to inform consumers about the costs associated with taking out a payday loan. AAAPL is making copies of the video available to organizations that wish to use it for consumer education purposes.
To order a copy, contact Joy Buffalo, chair of the AAAPL Education and Alternatives Committee, U of A Cooperative Extension Service, 2901 W. Roosevelt Road, Little Rock, AR 72204 or at 501-340-6650 or email@example.com. To preview the video, visit www.stoppaydaypredators.org.
High school students at Trezevant Career and Technology Center, a Memphis city school, are learning money management and employment skills in a unique program that started Sept. 25, 2007. That’s when the school opened Trezevant Bank, the first student-run bank in Tennessee.
Deposits on opening day exceeded $900. As of Jan. 7, 2008, the bank had 92 customers and assets totaling $2,424. Customers are mostly students at the school, although services are available to the community at large. Due to certain regulations, the bank offers only non-interest-bearing savings accounts.
The bank is open Tuesdays and Thursdays. Funds are deposited each day at a local First Tennessee Bank. Students keep records of all transactions.
The bank’s employees are 10th-, 11th- and 12th-grade students enrolled in the Banking and Finance Academy at Trezevant. Students learn how a bank operates by rotating every six weeks through various positions at the bank, including application clerk, greeter, teller, auditor, security guard and bank manager. Students also learn job readiness skills, such as etiquette, business protocol, professionalism and money management.
Trezevant Bank came about after Principal Milton A. Burchfield II observed a student-managed bank in New York City. He worked for a number of years to replicate the bank in Memphis. The venture received help from First Tennessee Bank, Wachovia Bank and the Memphis Area Teachers Credit Union. The bank’s advisory board consists of representatives of those financial institutions and other community partners, including the City of Memphis Division of Career Services and the Federal Reserve Bank of St. Louis, Memphis Branch.
Future plans for the bank include partnering with local elementary and high schools to encourage saving, securing grants to allow the bank to pay interest on savings accounts, partnering with churches and other community groups, and becoming a member of the National Association of Banks.
A new statewide initiative in Indiana is designed to help homeowners avoid foreclosure. The Indiana Foreclosure Prevention Network, a public-private partnership, distributes information on how to avoid foreclosure through a media campaign, a toll-free helpline and a web site.
The helpline, 1-877-GET-HOPE (1-877-438-4673), is available in Indiana from 8 a.m. to 8 p.m. seven days a week. The helpline provides free, confidential financial counseling over the phone for anyone who may be at risk of foreclosure.
The web site features an online education assessment that helps homeowners understand their options. Visit www.877GetHope.org for more information.
The media campaign includes billboards, newspaper advertising and radio commercials.
Keep up with what’s new and noteworthy at the St. Louis Fed. Sign up now to have this free monthly e-newsletter emailed to you.
Fed in Print: An index of the economic research conducted by the Fed.