How does foreclosure prevention work?

States and localities have adopted a range of short- and long-term educational, financial, legal, and regulatory policies for preventing foreclosures and protecting affected families and communities.  To develop a foreclosure prevention approach that meets local needs and offers a wide range of policy solutions, some communities have brought stakeholders together to form foreclosure prevention task forces that look at options for immediate assistance, post-foreclosure stabilization, and ways to reduce the risk of foreclosures in the future.  A second category of policy interventions involves counseling, legal services, short-term loans, and flexible refinancing programs that provide immediate assistance to borrowers who are delinquent on their mortgages.  To help when a foreclosure cannot be avoided, some communities have developed policies that help affected families -- both renters and owners -- to regain stable and affordable housing.  A final set of strategies focuses on reducing the risk of future foreclosures by understanding and responding to early indicators of financial distress and working to reduce the likelihood that families take out unsustainable mortgages.

Click on the links below to learn about ways to prevent foreclosures and and Help affected renters and owners. Establish a foreclosure prevention task force to facilitate a comprehensive approach Communities can develop a comprehensive response to foreclosures by convening representatives of government, industry, and non-profit organizations. Connect struggling homeowners with immediate assistance Strategies that provide immediate foreclosure prevention assistance include short-term emergency loans, preferential refinancing products, 24-hour hotlines, and expanded outreach by reliable non-profit assistance organizations. Help families regain stability after a foreclosure When preventing the foreclosure is not possible, communities can help families find, qualify for, or afford a new rental home. Reduce the risk of foreclosures in the future Communities can prevent foreclosure by increasing outreach in areas with high foreclosure risk and by helping families to avoid risky mortgage products. See the clickable timeline of foreclosure prevention policies. Click here to view other resources on preventing foreclosures and equity loss.

Click here to leave this section and learn about ways to stabilize the community by facilitating the reuse of abandoned, vacant, and tax-delinquent properties if foreclosures have already occurred.