WHAT IS Hope Now Alliance
Hope Now Alliance is an initiative launched in 2007 to combat the overwhelming volume of foreclosures created by the collapse of the subprime mortgage market. The Alliance is made up of members of the United States government, the secondary mortgage market, lenders, mortgage-backed securities (MBS) investors and homeowner advisory organizations. The group’s efforts to reverse the foreclosure trend have focused on contacting homeowners for loan modifications and workouts. The workouts can result in either a modified repayment plan, which simply updates the homeowner on his current payments but does not change the underlying conditions of his mortgage, or a loan modification, in which the terms of the mortgage. ‘mortgage are changed in order to make the loan usable for the owner.
Tactics included a nationally promoted website with information on foreclosure prevention, a free 24-hour phone number and free phone advice through the Homeownership Preservation Foundation.
FAILURE Alliance Hope Now
Hope Now Alliance says its “membership works to create a unified and coordinated plan to help homeowners, communities and government partners repair the mortgage market.” When it was first created in 2007, Hope Now Alliance attempted to fight the wave of foreclosures across the country as people who had been targeted by subprime mortgages lost their homes. Their efforts focused on helping homeowners who were at risk of losing their homes in the form of loan forgiveness, modified loans and financial advice.
After the largest wave of foreclosures was cleared and the economy started to improve, Hope Now Alliance moved from providing exclusive assistance to homeowners to promoting higher lending standards and more ethical behavior among lenders and other players in the mortgage industry. The goal is to stabilize the housing market by making the mortgage process simpler and less risky for lenders and borrowers.
Reviews of Alliance Hope Now
Hope Now Alliance was formed in 2007 when the housing market was in free fall following the subprime mortgage crisis. Hope Now Alliance said that in September 2009, it had helped more than 1.7 million borrowers in difficulty, and that in 2020 alone, it “reported more than two million solutions.” However, the actual number of borrowers, defined as those who have received long term help loans and are not permanently at risk of foreclosure as a result of their workout or loan modification, have not lost their homes to foreclosure and are able to get another mortgage, is unclear. Critics at the time claimed that the Alliance had not done enough to help borrowers in difficulty and that the deployment of group assistance was uncoordinated, leaving the owners confused and still threatened with foreclosure. Critics have also argued that Alliance member companies are slow to move, in part because as lenders and investors, they may lose money on their investment if borrowers receive loan modifications that reduce the amount owed on their loan. The main criticism was that the Hope Now Alliance marketed heavily to homeowners as a source of assistance, but was in fact a caretaker who received assistance to help less risky borrowers to benefit lenders.