Foreclosure

The past year has seen a steady increase in the rate of foreclosure in communities across the country. Nonprofit organizations and municipalities have worked diligently at the local level to respond to the growing crisis in a number of ways including raising awareness and conducting targeted outreach and counseling to homeowners in danger of foreclosure. Tightening credit and declining home values only place more strain on homeowners.

According to the Federal Deposit Insurance Corporation (FDIC):
 
·         1 of every 200 homes will be foreclosed upon
·         Every three months, at least 250,000 new families enter foreclosure
·         One child in every classroom in America is at risk of losing his or her home because their parents are unable to pay their mortgage
 
The reality is foreclosure is at crisis levels in our communities. The same organizations working to prevent foreclosure and preserve homeownership must also work to stabilize communities dealing with or threatened by the consequences of foreclosure. 
For more information and resources on preventing foreclosure, visit the NeighborWorks Center for Foreclosure Solutions.

 

Foreclosure Process

Practitioners must have a thorough understanding of the foreclosure process in order to identify key points of intervention to stabilize communities. Although foreclosure laws and timelines vary considerably from state to state, the steps involved in the process are similar. Nonprofit organizations must design community stabilization strategies that address the appropriate stage in the foreclosure process while taking into account the specific rules and regulations that apply to their community. The more community organizations that are armed with information on this complex process, the more effective they will be at mitigating its impacts.

Community Impact

Concentrated foreclosures can be devastating to communities and their residents, setting off a downward spiral of self-perpetuating decline. A complete understanding of the community impacts of foreclosure allows nonprofit organizations to make the case to local and state governments that comprehensive stabilization strategies are required. A compelling demonstration of community impacts can also help convince funders to make investments to help stop the decline.