What is the Hope Now Alliance?
Hope Now Alliance (now the Housing Policy Council - HPC) is a public-private initiative launched in 2007 to combat the overwhelming volume of home foreclosures that emerged from the subprime mortgage market meltdown. The Alliance is comprised of members from the U.S. government, the secondary mortgage market, lenders, mortgage backed securities (MBS) investors, and homeownership counseling organizations.
The group's efforts to reverse the foreclosure trend focused on contacting homeowners for loan modifications and workouts. Workouts can result in either a modified repayment plan, which simply brings the homeowner up to date on their current payments but doesn’t change the underlying terms of their mortgage, or a loan modification, in which the terms of the mortgage are modified in order to make the loan serviceable for the homeowner.
- The Hope Now Alliance was encouraged by the U.S. Department of Treasury and the HUD in 2007 to help homeowners avert foreclosure.
- Its website featured homeowner resources that navigate mortgage counseling, unemployment, and money management, and also sponsored events around the country to bring outreach efforts closer to the communities that need them.
- The Hope Now Alliance is now known as the Housing Policy Council (HPC), an association whose members are among the nation’s leading mortgage originators, servicers, insurers & data/settlement service providers.
Understanding the Hope Now Alliance
Hope Now Alliance states that its “membership works towards creating a unified, coordinated plan to assist homeowners, communities, and government partners to repair the mortgage market.” When it was initially created in 2007, Hope Now Alliance tried to fight the wave of foreclosures across the country as people who had been targeted by subprime mortgages lost their homes. Their efforts were focused on giving help to homeowners who were in danger of losing their homes, in the form of loan forgiveness, modified loans, and financial counseling.
After the biggest wave of foreclosures passed and the economy began to improve, Hope Now Alliance shifted its focus from exclusively helping homeowners to also advocating for higher lending standards and more ethical conduct among lenders and others in the mortgage industry. The goal is to stabilize the housing market by making the mortgage process more straightforward and less risky for both lenders and borrowers.
Their tactics have included a nationally-promoted website with foreclosure prevention information, a 24-hour toll-free telephone number, and free phone counseling through the Homeownership Preservation Foundation, among other efforts.
Criticisms of Hope Now Alliance
Hope Now Alliance was formed in 2007 when the housing market was in free-fall as a result of the subprime mortgage lending crisis. Hope Now Alliance claimed that as of September 2009 it had helped over 1.7 million distressed borrowers, and that in 2014 alone it had “reported over two million solutions.” However, the actual number of borrowers, defined as those who have received long-term help and are permanently not at risk for foreclosure as a result of their loan workout or modification, did not lose their homes to foreclosure and are able to obtain another mortgage, is unclear.
Critics at the time claimed that the Alliance did not do enough to aid distressed borrowers and that rollout of the group's assistance was uncoordinated, leaving homeowners confused and still at risk for foreclosure. Critics also claimed that the Alliance’s member firms were slow to move, in part because as lenders and investors they stood to lose money on their investment if borrowers received loan modifications that lowered the amount of money owed on their loan. The core criticism was that Hope Now Alliance marketed itself heavily to homeowners as a source of help, but was actually gatekeeping who received help to aid the least risky borrowers in order to benefit lenders.