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Fannie Mae reaches out to distressed homeowners
WaysHome allows for interactive role play; effort to educate troubled borrowers on ways to avoid foreclosure
By Adam Van Brimmer
The mortgage industry and distressed homeowners have what the captain of the prison guards in the movie "Cool Hand Luke" once called "a failure to communicate."
Lenders and government officials have been trying for better than two years now to convince those struggling to make their mortgage payments to seek help and not give up.
The message is lost on some, however, as evidenced by a national foreclosure rate above 3 percent. Another 7 percent of homeowners are more than 90 days behind on their payments.
One of the industry players, government-controlled mortgage owner Fannie Mae, is unwilling to give up on those who refuse to listen.
Fannie Mae launched a new website, knowyouroptions.com, on Thursday that includes an interactive video simulation that allows users to role play. The "WaysHome" feature, Fannie Mae officials hope, will connect with distressed homeowners.
"We need to try as many things as we can to reach as many borrowers as we can," Fannie Mae's Vice President of Marketing Meg Simeone said.
The "WaysHome" interactive video simulation takes a different approach than previous attempts by the mortgage industry to educate distressed homeowners about options to avoid foreclosure.
The video features three characters in various stages of distress: Miguel Gonzalez is current on his mortgage but concerned about his financial situation; Jackie Williams is chronically late with her payment and is letting other bills slide to keep up; Richard Lane is delinquent and facing foreclosure.
The simulation allows participants to make choices for the characters and shows the consequences, similar to a "choose your own adventure" book.
The video encourages distressed homeowners to seek help early and warns of the impact inaction can have on a person's credit and life in general.
"With a variety of financial hardships and other circumstances affecting homeowners across the county, making educated decisions is more important than ever," Fannie Mae spokesman Jeff Hayward said. "It's a travesty when people lose their homes because they don't know or understand their options."
Local real estate agent Rob Sales confirmed many distressed homeowners are unaware of the ways to avoid foreclosure, which include refinancing, loan modifications, forbearances and short sales. Sales specializes in helping distressed property owners sell their homes and said many troubled borrowers are too embarrassed by the situation to address it.
"For most, their home is their No. 1 investment, and when they get behind, they feel like they've failed," Sales said. "They take the attitude of 'I'm behind' or 'I'm underwater' and 'I have no choice but foreclosure.' In almost every instance, that's not the case."
Fannie Mae's "Ways Home" interactive video simulation conveys that message well, Sales said. The video also includes links to free counseling services approved by U.S. Department of Housing and Urban Development (HUD) and HUD's "Hope for Homeowners" mortgage programs.
"Ways Home" also offers useful forms for distressed homeowners, like a "contact log" to keep track of conversations and contacts at mortgage companies and a checklist of documents mortgage companies need to determine eligibility for refinancing, loan modification or forbearance.
"One of the first things I do when I sit down with distressed homeowners is tell them they are not alone," Sales said. "There are those out there with answers. You just have to know where to look."
ON THE WEB
Fannie Mae's "WaysHome" interactive video simulation is available at the knowyouroptions.com website. The feature educates distressed homeowners about the options to avoid foreclosure by allowing them to play the role of a troubled borrower in a real-life situation. The three characters featured in the video are in various stages of distress - current on loan but concerned about future; current but chronically late; delinquent and on way to foreclosure - to reflect the variety of challenges troubled borrowers face. The video allows the user to make choices for the character and see the consequences of those decisions.
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