Arkansas Receives Federal Aid To Tackle Foreclosure Problems

April 22nd, 2008

Arkansas in the southern part of US hugs the Mississippi River. Girdling Arkansas are mountains and lowlands of the river adding a touch of diversity. Little Rock is capital bustling with prosperity. Yet into this dream land are hanging dark clouds of foreclosures. In February it rose by 5% from 2007 and by 19% from January of the current year.

CCOA or Credit Counseling of Arkansas was sanctioned a federal grant of $145,485 to implement the various programmes it has launched – counseling and education – to help house owners ward off foreclosures. A total of $130 million is being disbursed through the National Foreclosure Mitigation Counseling Program. The Congress gave its approval in FY 08 Consolidation Appropriations Bill. The Arkansas grant is part of the $130 million.

The grant could not have come at a more critical point. Currently 1 million houses right across the country is in the grips of foreclosure. Locally the problem is grave. According to reliable figures released, foreclosures have gone up by 119% and 46% in Benton County and Washington County respectively in comparison to the same period in the previous year .CCOA stationed in Northwest Arkansas, will utilize the money by providing free counseling to the local house owners battered by foreclosures, without charging any fees.

The Credit Counseling of Arkansas is an agency certified by Urban Development having its own counseling staff who are specialists in mortgage delinquency issues. Sessions are held in which the counselor provides information to the house owner about the implications of foreclosures and what can be done to mitigate the crisis. There are many options – repayment of loan, forbearance or the taking of time to catch up with dues, refinancing or modification of loan terms, loan assumption, short sale or the selling of the unit by the borrower with the permission of the lender even though the value of the house is less than the loan amount, deed-in-lieu or handing over the title deed to the lender and thus canceling the loan although the amount may be less than the due figure etc. The counselors often link the lenders with the borrowers and negotiate with the former on behalf of the foreclosed victim. With lenders being also eager to avoid foreclosures an amicable working arrangement is often reached by which both parties and the neighbourhood benefits. The counselors thrash out matters with individual victims without taking any fees. House owners can also contact CCOA over a hotline.