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.
HOPI was launched in 2003 in response to high rates of foreclosures in Chicago over the prior ten years. The City of Chicago,
Neighborhood Housing Services (NHS) of Chicago, and the Federal Reserve Bank of Chicago created the initiative and brought together partners from lending, investment, and servicing institutions as well as non-profit organizations and the public sector.
HOPI uses a four-part strategy for foreclosure prevention:
- Pre-purchase and post-purchase counseling and education
- Direct intervention with delinquent borrowers
- Rehabilitation of foreclosed properties
- Research and analysis of best practices for the mortgage and servicing industry
NHS reports that the initiative prevented over 1,300 foreclosures in its first three years. |
Photo courtesy of Neighborhood Housing Services of Chicago
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The City of Chicago's 311 non-emergency hotline is at the heart of HOPI's direct intervention strategy. 311 operators connect delinquent borrowers with reputable credit counselors who can also help borrowers deal with their financial problems and negotiate with their loan servicer to avoid foreclosure. Borrowers are also linked with NHS or the city's Department of Housing for financial assistance, such as mortgage refinance or a short-term loan.
The City of Chicago is now one of many cities that use an existing non-emergency hotline to direct homeowners to foreclosure prevention resources. Communities without a non-emergency hotline can point residents to 1-888-995-HOPE, a national foreclosure prevention number provided by the Center for Foreclosure Solutions, a project of NeighborWorks America.
Another key element of the Chicago initiative is the close cooperation of lenders and servicers who help pay for the costs of the counseling, agree to restructure loans when needed, and work with the city on the disposition of foreclosed properties.
