Pinnacle Financial Lends a Hand to Subprime Borrowers

ORLANDO, Fla. -- Pinnacle Financial Corporation is coming to the aid of the nation's distressed subprime borrowers with a community service program that provides free tools and resources to help them avoid foreclosure. "Sadly, not a day goes by without news about the growing number of foreclosures among subprime loans in the U.S.," said Doug Long, CEO of Pinnacle Financial, a non-subprime lender.

Components of the company's "SOS: Solutions Out of Subprime" program include:

   -- A free consumer booklet available in both English and Spanish that
      helps borrowers determine when their rates will reset and by how much,
      and provides options for mortgages that are delinquent or in default.
   -- A toll-free help line: 888-2-SOS-HELP (888-276-7435).
   -- Free seminars about the options to avoid foreclosure.

The Subprime Dilemma

Subprime lending refers to the practice of making loans, typically with less favorable terms, to borrowers with poor credit histories. Beginning in 2004, many subprime lenders motivated by the robust housing market began to relax their credit criteria. However, Pinnacle Financial believes that more than half of those placed in a subprime loan could have qualified for traditional financing with more favorable terms.

Today, subprime mortgage originations have soared to 20 percent of the U.S. home loan market, compared to 9 percent from 1996 through 2004. With interest rates on an estimated $265 billion in subprime mortgages scheduled to reset upward to as much as 12 percent in 2007, the escalation of subprime mortgage defaults and foreclosures that began late last year shows no signs of ending.

Education and Early Intervention are Essential

Pinnacle Financial believes that education is essential to preventing foreclosure. Evidence a survey of delinquent borrowers conducted by Freddie Mac:

   -- 68 percent did not contact their lenders because they were in denial.
   -- 61 percent were unaware of the various workout options that could help
      overcome their short-term financial problems.
   -- 92 percent would have talked to their servicer had they known that
      options were available to them.

"It is important for all borrowers, but especially those in subprime mortgages, to seek help at the first sign of trouble paying their loans," Long emphasized.

Pinnacle Financial's SOS program is on the leading edge of solutions to the subprime crisis that are starting to emerge from both the private and public sectors. On April 17, the CEOs of Fannie Mae and Freddie Mac testified before the House Financial Services Committee about new products the government-sponsored enterprises will provide to help subprime borrowers avoid foreclosure while the Neighborhood Assistance Corporation of America announced it will offer refinancing assistance to lower-income homeowners struggling with subprime mortgage payments.

"Nobody wins when a loan goes into foreclosure and it will take a team effort to find workable solutions that help keep people in their homes for the long term, and help them get into mortgages they can afford both today and tomorrow," according to MBA Chairman John Robbins, CMB.

About Pinnacle Financial

Pinnacle Financial Corporation (www.pinnaclefinancial.com) is one of the nation's fastest growing independently-owned direct mortgage lenders, licensed in 48 states and employing more than 1,100 people.

For nearly two decades, Pinnacle Financial Corporation has been making homeownership a reality for millions of Americans by offering mortgage products that are unique to the industry and educating, empowering and protecting home buyers. It was the first in the industry to help borrowers make educated mortgage choices by providing easy-to-understand lending disclosure information that clearly states the benefits and risks associated with each of its products. The company also led the industry in fighting mortgage fraud and predatory lending practices.

The company works directly with Wall Street investors to design residential mortgage products that are unique to the industry. Founded in 1988 and headquartered in Orlando, Fla., Pinnacle Financial offers loans directly to consumers through its Retail Divisions and indirectly through its Wholesale Division.

Source: Pinnacle Financial Corporation

Web site: http://www.pinnaclefinancial.com/