Tami Hinton Director of Consumer Affairs September 16, 2010

1. Update to the Crisis 2010 NC Affordable Housing Conference “Housing Works” Housing Counselors: Stemming the Foreclosure Tide in Your Community2:15-3:30PMRaleigh Convention Center, Raleigh, NC Tami Hinton Director of Consumer Affairs September 16, 2010

2. Agenda • Background of State Home Foreclosure Prevention Project (SHFPP) • Phase II of SHFPP • NCCOB Outreach Efforts • Questions

3. History of State Home Foreclosure Prevention Project • Established in October 2008, “Emergency Program to Reduce Home Foreclosures” (H.2623; S.L. 2008-226) • Creates “State Home Foreclosure Prevention Project” (SHFPP) • Temporary Two-Year Program (Nov 2008 – Oct 2010) • Applied to Only Subprime Loans originated between 2005 and 2007 • Database to handle filings from servicers – 400,000+ filings submitted to system from 295 servicers • Funded capacity building grants for housing counseling agencies; grants ultimately awarded to 35 agencies

4. Phase II of SHFPP Act to Amend and Extend the Emergency Program to Reduce Foreclosure, (S 1216; S.L. 2010-168) • Extends SHFPP to May 31, 2013 • Beginning November 1, 2010, scope expanded to cover all “home loans” • Establishes State Home Foreclosure Prevention Trust Fund • One-time filing fee of $75 • Used toward admin costs, counseling and legal services

5. Key Procedural Elements to Amended SHFPP Statute • For “home loans”, servicers are required to send a pre-foreclosure notice to homeowners at least 45 days prior to foreclosure • Servicers must file notice electronically with NC Court System (Administrative Office of the Courts) • Within 3 days of the letter to borrower • Extension of pre-foreclosure period by 30 days if further efforts give reasonable prospect to avoid foreclosure • Compliance with pre-foreclosure notice and filing periods is element of proof at foreclosure proceedings

6. “Home Loan” Definition • Similar to “Subprime” Definition, but does not include: • APR threshold test and • origination time-frame requirement • Basic Elements • Borrower is a natural person • Debt primarily for personal, family, or household purpose • Principal amount of the loan < conforming loan size • Not an equity line, construction loan, reverse mortgage, or bridge loan • Intended at origination to be secured by borrower’s principal dwelling

7. Guiding Principles of North Carolina Efforts • Guiding Principles for State efforts: • Help reduce unnecessary foreclosures by facilitating communication prior to the filing of the foreclosure and by allowing time for voluntary resolutions. • Focus on willing homeowners who have a realistic possibility of retaining their homes. • Promote mutually beneficial resolutions for homeowners and investors, but must not interfere with contracts or impose solutions.

8. SHFPP Outreach for “Home Loans” • State outreach program (mailings and phone) to connect homeowner with housing counselor • Statewide toll-free call center to provide “warm” hand-off to counselors • Network of counseling agencies to provide 2,000+ counseling sessions per month • SHFPP staff assist counselors and homeowners in facilitating communication with servicers

9. Typical Life Cycle of SHFPP Loan • Pre-Foreclosure Notice Sent to Borrower – 45-day “pre-foreclosure” period begins • Within 3 days, Servicer files loan in “pre-foreclosure database” as “home loan” • NCCOB sends outreach letter to borrower During 45-days • Borrower takes no action • Conditional Certificate of compliance becomes available 45 days from filing and foreclosure proceedings may be initiated OR • Borrower contacts Call Center and is referred to Counseling Agency….

10. Typical Life Cycle of SHFPP Loan (cont’d) • Counseling Agency provides Foreclosure prevention counseling and assesses Borrower’s options • If borrower is interested in steps to avoid foreclosure, and appears able, counseling agency informs NCCOB of borrower’s request for 30-day extension of “Pre-foreclosure Period” • NCCOB determines if extension is appropriate – if so, “pre-foreclosure period” is 75 days • After 75 days, “Conditional Certificate of Compliance” is available • Loss Mitigation Packages submitted and reviewed by Servicer for evaluation

11. SHFPP Efforts Thus Far • Over 4900 foreclosures prevented documented by information in database • Nearly 12,000 borrowers have received foreclosure prevention counseling • NCCOB presently has 8 full-time positions dedicated to SHFPP, increasing staffing in Fall 2010 to meet increased demand • Legal Team Leader, Lynn Jarvis • Case Management Team Leader, Mary Holder, Contact: mholder@nccob.gov or 919.715.0195

12. SHFPP Phase II Grant Timeline • September 17, 2010 Letters of Intent due to NCCOB. • September 22, 2010 Grant applications available. • October 6, 2010 Grant applications due to NCCOB.

13. Questions? • SHFPP Director Will Corbett • SHFPP Phase II Grant Timeline • Follow-up Questions

14. Contact Info: • Tami Hinton, Director of Consumer Affairs • Email: Thinton@nccob.gov • Office: (919) 733-1133 • Fax: (919) 733-6918