foreclosure response: overview
Goal: Prevent Foreclosures and Stabilize Neighborhoods

Due to the sharp rise in mortgage defaults in recent years, many communities have instituted programs focused on keeping existing homeowners in their homes, rehousing displaced families quickly, and restoring foreclosed properties. Foreclosure prevention programs help homeowners who have defaulted on their mortgage and are in danger of losing the property (and any accumulated equity) through foreclosure or a forced sale. By providing these families with counseling and access to affordably priced refinancing options, foreclosure prevention can keep families in their homes while preserving home values and stability in the surrounding community. Programs that help with foreclosure response also include assistance to both owners and renters affected by foreclosures. By helping families understand their rights and either remain in the property or find a new affordable unit when displacement is unavoidable, state and local communities can help families regain their footing and stabilize affected neighborhoods as well.

Why should communities get involved in foreclosure prevention and response?

Solutions in Action
Communities across the country are facing rising foreclosures due to a combination of poorly underwritten mortgages, reduced home values which have made it more difficult for owners to refinance, and, increasingly, income reduction and unemployment.

Foreclosures affect more than just individual borrowers. Government efforts can help both struggling homeowners and the community overall by:
  • helping families stay in their homes and retain their equity,
  • preventing widespread losses in low- and moderate-income homeownership,
  • stabilizing communities,
  • safeguarding local property tax rolls, and
  • protecting nearby homeowners from equity loss.
    What policies can help prevent and respond to foreclosures?

    Foreclosure prevention policies can target assistance directly to families in need, or they can focus at the community level on reusing foreclosed properties and modifying the regulatory environment to reduce foreclosures and their impact on neighborhoods. The policies that can help prevent and respond to foreclosures vary depending on how deep into financial trouble families are and how much of a toll foreclosures have taken on the neighborhood.

    Where can I learn more about foreclosure prevention and neighborhood stabilization?'s sister site,, provides a wealth of information on ways that state and local governments can help to prevent foreclosures and stabilize communities affected by a large volume of foreclosures.

    Photo courtesy of Neighborhood Housing Services of Chicago

    Chicago's Home Ownership Preservation Initiative (HOPI) is an early example of a one-stop approach to foreclosure prevention that includes both counseling and research efforts to prevent foreclosures now, reduce foreclosure risk in the future, and mitigate the damage foreclosures can cause.

    Neighborhood Housing Services, the organization that administers HOPI, reports that the initiative prevented over 3,900 foreclosures since 2003.

    Learn more about HOPI...
    This project, which is a collaboration of the Center for Housing Policy,
    the Local Initiatives Support Corporation (LISC), and the Urban Institute, includes a comprehensive policy guide as well as data and interactive maps.

    Dorchester TowersClick here to visit and learn more about foreclosure prevention and neighborhood stabilization.

    The Center for Housing Policy gratefully acknowledges the input and feedback provided for the initial version of this policy section by the following reviewers (in alphabetical order): Sonia Garrison, Self-Help; Steve Tuminaro, NeighborWorks America; and Christen Wiggins, Neighborhood Housing Services of Chicago. Please note, however, that the views and opinions expressed on are those of the Center for Housing Policy alone.