1. American Federation of Labor and Congress of Industrial Organizations The Foreclosure Crisis: Causes and Solutions

2. The housing market bubble Source: S&P/Case-Shiller Home Price Indices

3. Unemployment is the leading cause of foreclosure Source: Congressional Oversight Panel, March 2011

4. Homeowners are not to blame! The foreclosure crisis was caused by: Wall Street Greed Mortgage backed securities and subprime lending Regulatory Failures Lack of government regulation of the financial sector Unstable Economy Wages stagnated leading to greater household debt

5. Foreclosure rate heat map Source: RealtyTrac, April 2011

6. Disproportionate impact on communities of color Reverse redlining - Banks sold subprime loans to homeowners who qualified for prime loans Subprime loans are more at risk - 21.26 percent of subprime fixed loans and 25.32 percent for subprime adjustable rate loans are delinquent. What started as a subprime crisis now affects all Americans - 63 percent of all foreclosures are now fixed prime loans.

7. Advice for Homeowners: Tip #1: Start Early The sooner you take action, the more likely you will be able to save your home. Homeowners should take action when they first have trouble paying their mortgage Help may be available even if you are still current on your mortgage payments Do not wait for a foreclosure filing before seeking help – act now!

8. Advice for Homeowners: Tip #2: Seek Help Seek help – you have a greater chance of success if you have an expert on your side Work with a non-profit housing counselor who is familiar with loan modifications Free help is available from government-qualified housing counselors Be wary of scams offering help for a fee

9. Advice for Homeowners: Tip #3: Stick With It The mortgage modification process can take a long time to complete Keep copies - the bank may ask for the same document multiple times Continue to seek a modification even if you also receive a foreclosure notice Stay in contact with your bank and HUD approved housing counselor

10. Ask for a short-sale or deed-in- lieu of foreclosure Occupy home payment free during foreclosure Negotiate a mortgage modification with the bank Three options for homeowners who are at risk of foreclosure

11. Ask for a short-sale or deed-in-lieu of foreclosure Short-sale: you find a buyer for the home Deed-in-lieu: you give the bank the home The bank may forgive your unpaid loan principal Hurts your credit score and you have to move

12. Occupy your home payment free during foreclosure Banks often wait 3-6 months to initiate a foreclosure Foreclosure takes 3-12 months (varies by state) Homeowners can save cash for the future Hurts your credit score and you have to move

13. Negotiate a mortgage modification with the bank The goal of a mortgage modification is to reduce the monthly payment to an affordable level Banks and mortgage investors have an incentive to avoid costly foreclosures Getting a modification usually requires showing that the homeowner has an economic hardship Homeowner keeps their home

14. Different types of mortgage modifications are available Principal Forgiveness Interest Rate Reduction Forbearance Term Extension Repayment Plan Most Effective Least Effective

15. Finding a housing counselor Be wary of scams asking for money Free home counseling is available to homeowners facing foreclosure U.S. Housing and Urban Development provides a list of government-approved counselors www.makinghomeaffordable.gov Hotline Number: (888) 995-HOPE www.makinghomeaffordable.gov

16. Finding a housing counselor www.naca.com (888) 404-6222 www.ahcoa.org (888) 409-3557 www.unionplus.org (866) 490-5361

17. Questions?