Northern CA Urban Development and EARN Group to Create Program To Address Home Foreclosure Crisis

May 4, 2009 - PRLog -- Northern California Urban Development (NCUD), a non-profit group committed to eliminating poverty in Northern California’s urban communities, and the EARN Group, a developer of real estate financing tools that replace a portion of traditional mortgage debt with third-party equity financing, today announced an innovative partnership designed to help many San Francisco Bay Area homeowners keep their homes.  

Through the Foreclosure Prevention Program, NCUD and EARN are working with several Bay Area municipalities to help immediately reduce mortgage defaults by refinancing existing loans and replacing a portion of the current mortgage debt with an equity investment. The Foreclosure Prevention Program targets owner-occupied homes currently in default by more than 90 days.  If the homeowner can qualify for a lower mortgage payment on approximately 70 percent of the current fair market value of the home, the balance of the financing will come from local government agencies that will replace the remaining debt with an “EARN Equity Certificate.”  This certificate has no current payment requirement for the homeowner.  Instead, the homeowner will share that portion of the home’s future appreciated value with the local government agency.  

“The Foreclosure Prevention Program is a financial lifeline to an increasing number of working middle class and lower income Americans who are on the brink of losing their homes and falling off a financial precipice from which they will most likely never recover,” said John Liotti, NCUD’s co-founder and chief executive officer.  “After analyzing the merits of dozens of financial proposals, it became clear to us that only The EARN Group’s ”debt for equity” exchange approach had the potential to make a real and lasting difference in our communities.”

Based on existing mortgage interest rates, NCUD estimates that homeowners who enter its Foreclosure Prevention Program may be able to reduce their current monthly housing costs by 40-50 percent or more.  Experienced NCUD foreclosure counselors will work with the homeowners and The EARN Group will negotiate with the current lender. NCUD and EARN are currently working a number of Bay Area cities who have expressed interest in the program, including the City of Menlo Park and the City of East Palo Alto.

“The housing crisis that began last summer shows no sign of going away anytime soon.  Home foreclosures across the country are devastating not only to the families who lose their homes, but to their neighbors, their communities, and the entire banking system,” said David Shapiro, president and CEO of The EARN Group. “For housing prices to stabilize, a portion of debt must be taken out of the equation. The Foreclosure Prevention Program is significant not only because it reaches out to homeowners who may not qualify for any of the current federal government programs, but, more importantly, because it is the only program that exists today that reduces housing debt by valuing both the risk and rewards of home ownership.”

San Francisco Bay Area homeowners interested in learning more about the NCUD’s Foreclosure Prevention Program can contact NUCD via email at info@norcaludc.org or by phone at 650-328-1890.  Municipal government elected officials and administrators interested in learning more about this program should contact Cynthia Ruiz at cynthia@norcaludc.org.

Contact:  
For NCUD - Cynthia Ruiz
650.328.1890
cynthia@norcaludc.org  

For EARN – George Millington
408.369.7200 x2974
gmillington@walt.com
http://www.walt.com

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About Northern California Urban Development
NCUD’s mission is to relieve the causes and effects of systemic and generational poverty focuses on economic development, community development and leadership development in Northern California. More information about NCUD can be found at http://www.norcaludc.org.

About The EARN Group
Headquartered in Los Gatos, Calif., The EARN Group has created a variety of home financing tools that replace a portion of the real estate debt financing with equity financing. The EARN Group is at the leading edge of changing the way Americans view financing owner occupied homes. More information on The EARN Group can be found at http://www.earngroup.com.