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adjustable interest rates and balloon payments. When the borrower <br />cannot meet the increased mortgage payment they default and the <br />property goes into foreclosure. <br />Neighborhood Housing Services, NHS, and Neighbor Works America are <br />two national housing intermediaries that have created innovated programs <br />in Chicago, Baltimore, and New York City designed to reduce the impacts <br />of foreclosures and subprime lending in those affordable housing markets. <br />Remedial Actions: <br />The City of San Marcos should continue pursuing CDBG and State HOME <br />and Neighborhood Stabilization Program (NSP) funding if it becomes <br />available to provide home buyer assistance and subsidies to homebuyers <br />to acquire foreclosure property and get it back into commerce. Some of <br />the buyers that have already acquired housing in San Marcos utilizing <br />entitlement funds from the City and State will likely face the issues of <br />foreclosure. The City, if successful in obtaining additional funding, should <br />consider expanding its program goals to consider initiatives that reduce <br />mortgage defaults and foreclosure rates among low and moderate income <br />home buyers. <br />The City should work with the State, National Non - Profit Housing <br />Intermediaries and HUD to identify funding that can help reduces the <br />mortgage default rate and foreclosure rates among low and moderate <br />income home buyers and existing home owners. These programs offer <br />initiatives such as loan default prevention programs based on providing <br />counseling to affected borrowers, assistance with identifying alternative <br />products that helps borrowers avoid subprime lending, and assistance <br />with re- negotiation for more favorable terms for borrowers with subprime <br />loans. These programs identify government assistance programs that also <br />serve to assist distressed borrowers and are currently evaluating the <br />97 <br />