Home HeadQuarters in Syracuse, New York, has partnered with the city of Syracuse and Syracuse United Neighbors to develop a foreclosure prevention program that helps families preserve homeownership.

Home HeadQuarters, established in 1996, is a partnership of residents, local businesses, and government that works to improve the quality of housing in Syracuse neighborhoods. The agency offers innovative loan products, community and economic development programs, and homebuyer counseling and education. Home HeadQuarters became a certified community development financial institution (CDFI) by the U.S. Treasury in 1999 and became a NeighborWorks HomeOwnership Center in 2000.
 
In 2003, Syracuse United Neighbors (SUN), another local nonprofit organization, conducted resident surveys that showed a link between low-income census tracts and neighborhoods with high foreclosure rates. In response, SUN asked the city of Syracuse and Home HeadQuarters to help create a comprehensive foreclosure prevention strategy. Both agreed, and implemented a foreclosure prevention program in 2004.

Program Focus.  Home HeadQuarters discovered that the primary reason homeowners fell to foreclosure in Syracuse was due to predatory lending situations. Job loss and insufficient income were secondary causes. Based on this information, the agency decided to focus on budget and credit counseling and loan modifications.

Counseling and Loan Modifications.  Customers meet one-on-one with Home HeadQuarters staff to review their financial situation and create a working budget. Staff communicate with lenders on behalf of the homeowner and help customers navigate the loan modification process. This includes referrals to appropriate lender representatives, assistance with hardship letters, and help with creating affordable loan modifications. Any homeowner living in or near Syracuse can come to Home HeadQuarters for foreclosure prevention counseling free of charge.

Financial Assistance.  Home HeadQuarters offers foreclosure prevention loans for homeowners in default, although funding for this program is limited. Eligible borrowers can receive up to $2,000 to pay a partial claim to the bank, but their financial situation must be stabilized and the cause for delinquency must involve extenuating circumstances. The borrower’s income must be at or below 80 percent of the area median, and the home must be within the city limits. Borrowers must also contribute 25 percent of the total amount needed from their own funds.
 
These loans are forgiven if the borrower attends Home HeadQuarters’ budget and credit counseling sessions every three months for one year. If the borrower does not satisfy the counseling commitment, a lien is placed on the property.

Additional Resources.  Home HeadQuarters staff also help customers connect with local programs that improve their financial situation, including the New York State Home Energy Assistance Program (HEAP), legal services, social services and employment services.

Education.  Home HeadQuarters has incorporated foreclosure prevention information into its standard homebuyer education classes. Staff include details on local predatory lending issues, a list of trustworthy lenders, and information on the foreclosure prevention program.

Foreclosure Advisory Committee.  Home HeadQuarters developed a Foreclosure Advisory Committee to support the foreclosure prevention program. The committee is made up of lenders, lawyers, local residents, city employees, and representatives from local nonprofits. Committee members approve foreclosure prevention loans and provide advice for each customer.

Program Marketing.  Program marketing consists primarily of grassroots outreach, in addition to free and paid advertising. The city of Syracuse printed 5,000 brochures, which were distributed at local agencies, housing fairs and public meetings. Home HeadQuarters also printed 5,000 “door hangers,” or hanging pamphlets, which are distributed door- to-door by Home HeadQuarters staff and partner organizations. (The door hangers include program information and foreclosure prevention tips.) Staff regularly make announcements and provide literature at public and neighborhood meetings and at agency workshops.

Partners.  Home HeadQuarters’ primary partner is the city of Syracuse, which provides program funding and marketing assistance. Other partners include SUN, the Fair Housing Council, Northeast Hawley Development Association, local financial institutions, and other nonprofit organizations. Partners provide a mix of tangible resources, financial, and technical assistance and referrals.

Staffing.  One Home HeadQuarters staff member works full-time to coordinate the foreclosure prevention program.

Costs and Funding.  Program costs include staffing, marketing, loan costs, and business expenses such as credit reports and mailings. Home HeadQuarters estimates the total cost at about $85,000 a year. Program funding comes from the city of Syracuse and Home HeadQuarters’ operating budget.

The Foreclosure Prevention Program has added an important postpurchase component to Home HeadQuarters’ homeownership activities and is helping to provide sustainable homeownership opportunities for area residents. While getting people into homes is the primary focus for most housing organizations, the challenge of keeping them in their homes is just as important. The foreclosure prevention program provides Home HeadQuarters’ staff with an opportunity to learn new strategies, plus teaching homeowners skills to remain financially secure.
 
From May 1, 2004, to April 30, 2005, 94 residents received counseling through the program. Forty-eight percent of these customers had subprime or predatory loans. Home HeadQuarters staff worked with 34 different lenders to remedy customer delinquencies, and 23 borrowers received foreclosure prevention loans from Home Headquarters.

• Foreclosure prevention programs are both time- and labor-intensive, since most customers need extensive counseling. On average, customers at Home HeadQuarters need five hours of counseling, though many require up to 10 or 15 hours.
   
• Foreclosure prevention activities are also time sensitive. Staff must be able to respond quickly to customers’ needs and must connect with lenders right away. Staff also must be skilled in negotiation and able to work with lenders to promote long-term commitments.
   
• It is extremely important to get clients in the door early-on. It is easier to negotiate a loan that is only one or two months delinquent. Once a loan falls four or more months behind, it becomes difficult to negotiate workable terms. Plus, legal fees are often added in, which increase the amount owed.
   
• Advocacy is critical for success. Staff should be well-informed of local resources and make useful referrals. Contacts need to be established at local agencies and those relationships must be maintained. Ask partners to join the advisory committee so they can provide ongoing advice and support.

Agency interview on 07-26-05 with: Kelly Besaw, Foreclosure Prevention Case Manager and Camille Tisdel, Grant and Data Coordinator.