The Neighborhood Assistance Corporation of America announced that they have set aside $1billion for the refinancing of subprime mortgages, but it’s not nearly enough. From the Washington Post (emphasis ours):
NACA requires that people who ask for its help attend intensive housing counseling workshops. It also assesses the person’s ability to own and maintain a home. It then helps the person obtain a mortgage with one of its partner lending institutions, the biggest ones being CitiGroup and Bank of America.
In 2003, Citigroup made available $3 billion in mortgage loans to NACA through 2013. Bank of America, which has worked with NACA since 1995, committed at least $6 billion through 2015.
The group traditionally found the money was best used to finance new home loans for low- and moderate-income buyers.But with the mortgage crisis unfolding, it decided that $1 billion should be used to refinance the loans of people preyed upon by abusive lenders. The group expects to refinance about 7,000 mortgages — a small number, given estimates that more than 1 million homeowners nationwide could be at risk of foreclosure.
If the Washington Post’s numbers are correct, people facing foreclosure in the US will need an additional $142 billion in financing. —MEGHANN MARCO
$1 Billion Pledged to Help Fend Off Foreclosures [Washington Post]