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Chapter 11 The Role of Default Counseling for Mortgage Borrowers in Financial Distress J. Michael Collins Homeownership has long presented an opportunity for economic mobility.

A large share of the nation's foreclosures resulted from mortgages denominated in the most dangerous type of collateral. These borrowers were primarily underwater — at least 45 percent of their household income went to payments on these loans. In addition, a smaller share of these borrowers — 30 percent — faced less severe foreclosure terms than the total, but only because these borrowers' default rates had declined by only about 1 percentage point. Although these trends have remained in a steady downward trend throughout the past year, they are continuing, with the foreclosure rate projected to rise from 16 percent in the third quarter of 2008 to about 20 percent by the fourth quarter of 2009 and beyond (Graphic, 7). The default rate would be even higher since many of the defaults are for loans issued in the past year. A number of recent studies indicate that a majority of such loans are “subprime,” meaning they are made by lenders that are most likely to issue loans with higher rates of default or worse terms than typical prime loans. As default rates rise, however, many of those who took out these subprime loans will experience financial distress. According to the Mortgage Banking Study, nearly one in ten (7 percent) single-family home borrowers had negative net worth as of mid-2009. The vast majority of subprime loans were originated in 2007 and later, and most of these subprime loans were made to borrowers who had been underwater on their mortgages when the loans were created. These underwater borrowers were more likely to face foreclosure, which raises the question of which homeowners will suffer the most when their mortgages will default (CPC, 2006). As a result, the CPC suggests a combination of foreclosure prevention strategies (e.g., low fees on home equity line of credit) and mortgage refinancing programs (e.g., high-cost adjustable rate mortgages). As foreclosure rates continue rising, it will be even more important to make changes in mortgage refinancing programs that help homeowners who are already underwater or are at least at the lower end of the loan-to-value. Figure 4: Homeownership Rate by Income Subgroup, 2004 to 2009 Figure 5: Homeownership Rates of Households In the second part of this article, the author discusses the role of home and economic distress for households' ability to afford a mortgage. The following analysis examines the effects of changes in homeownership of different sizes over the last nine years.

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What is form role of default?

Form role of default is a document that is used to report default information of individuals or entities.

Who is required to file form role of default?

Financial institutions such as banks, credit unions, and other lending institutions are required to file form role of default.

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Form role of default can be filled out online by providing the necessary default information of the individual or entity.

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The purpose of form role of default is to provide a record of default information for regulatory and reporting purposes.

What information must be reported on form role of default?

Form role of default must include details such as the name of the individual or entity, the type of default, the date of default, and any relevant supporting documentation.

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The deadline to file form role of default in 2023 is typically April 15th, but it is always recommended to check with the specific regulatory authority for any changes or updates.

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