Gov. Bev Perdue and the N.C. Office of the Commissioner of Banks (NCCOB) recently announced that the State Home Foreclosure Prevention Project has helped more than 1,000 North Carolina homeowners avoid foreclosure since the program's inception in Nov. 2008. At least six UNC School of Law students have volunteered for the project through the Pro Bono Program.
"North Carolina is committed to helping our citizens avoid foreclosure," said Gov. Perdue. "This program is critical to many families in our state as we continue to do all we can to help homeowners stay in their homes."
Last year, the General Assembly enacted the emergency program to reduce foreclosures on subprime loans and directed NCCOB to develop and implement the program.
The program requires mortgage companies to file notices with the state in advance of foreclosure on subprime loans and authorizes the Commissioner of Banks Mark Pearce to delay a foreclosure filing by 30 days, if the commissioner believes a foreclosure can be prevented.
"This project provided our students with the opportunity to better understand the legal issues involved with the foreclosure crisis," says Sylvia Novinsky, assistant dean for public service programs. "This is the kind of project our students become a part of and gain experience that will help them counsel future clients who are experiencing difficulties."
In Oct. 2008, the UNC Center for Banking and Finance hosted Pearce and Will Corbett from -NCCOB to discuss the Foreclosure Project. They sought the assistance of law students to conduct a "Red-Flag Review" of loan documents to make sure that they comply with North Carolina and Federal lending laws and identify loans for further review by the commissioner's internal staff.
The success of the Foreclosure Project shows that foreclosures can be prevented if homeowners, lenders, counselors and the state work together, says Pearce. In the first seven months of operation, the program has prevented more than 1,000 foreclosures and connected over 3,000 homeowners to housing counseling agencies for foreclosure prevention counseling. The economic impact of the program to date is estimated at $86 million.
"We expect more of our students to volunteer for this project through the Pro Bono Program next year," says Novinsky. "One of the priorities of our program and our school is to assist the people of North Carolina, and this is a project that will enable us to do that in a way that truly matters."
-June 19, 2009