Chicago Housing Commissioner John G. Markowski announced Thursday that 756 Chicago families were saved from losing their homes by a new foreclosure prevention program, making Chicago a national leader in preventing foreclosure.

The program, known as the Home Ownership Preservation Initiative (HOPI), is a partnership of the public, private and non-profit sectors to assist hard-pressed homeowners and turn vacant properties into affordable homeownership opportunities.

At a news conference at the Federal Reserve Bank of Chicago, 230 S. La Salle St., where he was joined by Michael Moskow, President and CEO of the Federal Reserve Bank of Chicago, Markowski said the program also had reclaimed 132 vacant, foreclosed properties and made them available to families seeking affordable housing.

Markowski cited a survey by the National Training and Information Center (NTIC) that showed foreclosures in Chicago decreased by 13 percent in 2003 compared with 2002, the first decrease in a decade. Foreclosures on loans with an interest rate more than 6 percent above prime dropped 40 percent, partly because of the City's tough ordinance against predatory lending.

"These positive developments are a credit to the many innovative programs that have grown out of our Homeownership Preservation Initiative," Markowski said. "We are committed to helping more Chicagoans become homeowners and keeping people from losing their homes to foreclosure."

Markowski said the HOPI program has prompted a number of lenders to change their business practices, by offering their customers counseling and loan assistance, rather than immediately placing delinquent loans in collection.

Several lenders - including GMAC-RFC, Chase and Citigroup - are teaming up with Neighborhood Housing Services to offer Homeowners' Workshops to customers in high-foreclosure neighborhoods.

Lenders such as Citigroup, J.P. Morgan Chase, Option One, HSBC and Washington Mutual are donating and discounting foreclosed properties to be rehabbed and resold as affordable housing. GMAC-RFC has stationed two staff members in Chicago to deal directly with borrowers who have financial problems.

Bruce Paradis, president and CEO of GMAC-RFC, a leading lender, said HOPI is prompting lenders to change business practices by offering education, counseling and loan assistance to customers, rather than immediately placing delinquent loans in collection.

"We also need to extend the model to practices on the front-end to stop bad loans from ever being made," Paradis added.

The 20-month old HOPI initiative was developed by the Chicago Department of Housing, the Federal Reserve Bank of Chicago, mortgage lenders and loan servicers, and the non-profit Neighborhood Housing Services of Chicago (NHS).

More than 2,100 families have participated in counseling sessions since HOPI began.

Families in danger of foreclosure can call the City's 311 non-emergency information number and be immediately connected with credit counseling.

NHS and lenders also are reaching out to borrowers in low- and moderate-income neighborhoods to identify those who need assistance to keep their homes.

"The HOPI partnership is a remarkable example of cooperation among the public, private and non-profit sectors," Markowski said. "By helping prevent foreclosures and vacant buildings, we are keeping our blocks and neighborhoods strong."

"HOPI sprang from our distress that, despite years of successful neighborhood revitalization partnerships, predatory lending and increasing foreclosures could drag neighborhoods back down again," said Bruce Gottschall, executive director of NHS Chicago.

"It didn't take long to realize that everyone involved had something to gain when families were saved from losing their homes and that no one benefitted from completed foreclosures."

The partnership aims to prevent 1,500 foreclosures, counsel 3,000 homeowners and reclaim 300 properties before April of 2006.

Mortgage lenders, leaders in other cities and national community development organizations are paying attention to the success of the partnership for lessons on how they can improve loan servicing practices to prevent foreclosures.

"HOPI has been an ambitious, and so far very successful, effort," Moskow said. "It now stands as a model for other cities to adapt."

Markowski noted that seven cities - Baltimore, Atlanta, Detroit, Philadelphia, Columbus, Cleveland and Cincinnati - have expressed interest in adopting their own versions of HOPI.

Neighborhood Reinvestment Corporation, a national nonprofit organization created by Congress to provide financial support, technical assistance, and training for community-based revitalization efforts, recently launched the Center for Foreclosure Solutions. The Center is using the HOPI model to begin establishing similar foreclosure prevention partnerships in other cities across the country.