NeighborWorks CEO Ken Wade Emphasizes Importance of Homeownership Counseling on the Tavis Smiley Show

On December 18, NeighborWorks America CEO Ken Wade was interviewed on the Tavis Smiley show, where he emphasized that homeownership is still a good opportunity for many people, including in areas impacted by foreclosure. According to Wade, it appears that those interested in buying are seeking upfront counseling.

"The groups that we work with are seeing record numbers of people coming in to get homebuyer education," Wade said. He added, "We think working with a local community-based organization, a housing counselor, will best position someone to be able to improve their credit if that's an issue, find the right mortgage product for them and put them on the path to successful homeownership."

Check out the interview.

FY 2010 Appropriations Bill for NeighborWorks America Signed

We are pleased to announce that on December 16, 2009, President Obama signed into law H.R. 3288, which provides FY 2010 appropriations for the Departments of Commerce, Defense, Education, Health and Human Services, Housing and Urban Development, Justice, Labor, State, Transportation, the Treasury, and Veterans Affairs, and other agencies – including NeighborWorks America.

NeighborWorks America’s FY 2010 appropriation totals $233 million, and includes:

• A base budget of $133 million


• An additional $65 million to continue the National Foreclosure Mitigation Counseling Program, and


• An additional $35 million for capital grants to rehabilitate or finance the rehabilitation of affordable housing units.

This compares favorably to the FY 2009 appropriation which provided:

• A base budget of 131 million; and


• An Additional $50 million for the National Foreclosure Mitigation Counseling program

Particularly in the midst of the current economic/budgetary environment, the corporation’s FY 2010 appropriation is a real testament to the hard work of NeighborWorks America staff and the staff and boards of local NeighborWorks organizations across the country, making a difference in the lives of the families and communities they serve.

Community Stabilization in Action: New Videos Show Local Efforts to Revitalize Neighborhoods

NeighborWorks America has released three new videos highlighting work being done on the ground by nonprofit organizations to revitalize neighborhoods.

Chelsea Neighborhood Developers, Chelsea, Massachusetts

Over the course of 2009 the City of Chelsea and Chelsea Neighborhood Developers partnered with residents of the Bellingham Hill section of the Shurtleff-Bellingham neighborhood to create a new vision for the area. This video profiles this work and highlights ways Chelsea Neighborhood Developers, the City and residents are working to address the impacts of foreclosure and revitalize the Bellingham Hill neighborhood. View video»

Beyond Housing, St. Louis, Missouri

Beyond Housing, Inc. has worked since 2002 to provide services to thousands of residents in the City of Pagedale in St. Louis County, MO. This video profiles the place-based approach Beyond Housing has taken to stabilize neighborhoods of Pagedale hit hard by the foreclosure crisis. View video»

LaCasa, Inc, Elkhart and Goshen, Indiana

LaCasa, Inc. works in partnership with individuals and community partners to create opportunity for personal growth, family stability and neighborhood improvement. This video profiles the strategies LaCasa, Inc. has used to counter the devastating impact the economic downturn and the rise in foreclosures has had on neighborhoods in Elkhart and Goshen, IN. View video»

The Oprah Magazine Highlights NeighborWorks America’s Foreclosure Help

NeighborWorks America’s foreclosure help was featured in the latest issue of O, The Oprah Magazine, in an article about a divorced mother of two who had fallen behind on her mortgage and other financial obligations after losing her job. In the article, “9 Ways to Get Your Finances Back on Track,” financial columnist Michelle Singletary maps out a financial rescue plan for Tisa McGhee and others who may be in a similar situation.

“I suggested Tisa turn to NeighborWorks America (NW.org), a nonprofit that helps consumers avoid foreclosure, and the agency intervened,” wrote Singletary as she described McGhee’s struggle to rework her mortgage and stay on top of her payments. “If you are having trouble paying your mortgage, you can also contact a free counselor approved by the U.S. Department of Housing and Urban Development (find one through HopeNow.com or at 888-995-4673),” Singletary continued.

Her advice is in line with the message we send to struggling homeowners, who can also locate a counselor near them at http://www.findaforeclosurecounselor.org/.

NeighborWorks America Receives $425,000 Grant from CITI Foundation

NeighborWorks America has received a $425,000 grant from Citi Foundation to enhance the professional capabilities of housing counselors. The grant will be used by the NeighborWorks Center for Homeownership Education and Counseling (NCHEC).

“Citi Foundation’s generous grant strengthens our ability to help nonprofit housing counselors to build the knowledge and skills they need to assist families who are struggling to maintain homeownership during this national housing crisis,” said Ken Wade, CEO of NeighborWorks America.

NCHEC provides homeownership counselors with access to quality tools, materials, best practices and uniform standards designed to help low- to moderate-income clients make informed homeownership decisions. Homeownership counselors play a critical role in helping homeowners develop budgets, accumulate savings and protect their housing investment.

With support from the Citi Foundation, NCHEC will provide training and certification to more than 400 housing counseling practitioners who will reach as many as 40,000 low-to moderate-income individuals with pre- and post-purchase homeownership education and foreclosure intervention counseling.

“As people struggle in this uncertain economy, Citi and Citi Foundation believe that it is essential that financial education and asset building programs deliver results and make a difference in peoples’ lives,” said Daria Sheehan, senior program officer, Citi Foundation. “We are proud to partner with NeighborWorks to provide the training to help practitioners assist low-income individuals in achieving their financial goals.”

NeighborWorks Report Cites Job Loss or Reduced Income As Top Reason Homeowners Are Facing Foreclosure

NeighborWorks® America, the administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, announced that more than half (54 percent) of homeowners who received foreclosure counseling through the NFMC Program reported the primary reason they were facing foreclosure was reduced or loss of income. This finding was reported in NeighborWorks’ fourth Congressional report, which reported on NFMC Program activity through August 18, 2009.

Over the course of the NFMC program, which began January 1, 2008, the percentage of homeowners who cited reduced or loss of income as the top reason they were facing foreclosure has steadily increased. In the June 2009 Congressional report, 49 percent of NFMC counseled-homeowners reported reduction or loss of income as the primary reason; 45 percent cited this reason in the February 2009 report; as did 41 percent in the October 2008 report. This parallels the nation’s unemployment rate, which until the November 2009 employment report, had steadily increased since October 2008.

“For the last year this nation has witnessed the highest unemployment rate and the largest number of job losses in over a generation,” said Ken Wade, CEO of NeighborWorks America. “Our report proves what many already believed to be true — no longer are mortgage payment increases, or even health issues or divorce, cited as the top reason homeowners are facing foreclosure. With the unemployment rate steadily increasing over the last year, it’s no surprise that reduced or loss of income is now the primary reason countless homeowners are facing foreclosure.”

The report also found that 56 percent of all NFMC clients held a fixed-rate mortgage. Forty-three percent (43%) of clients held a fixed rate mortgage with an interest rate below 8 percent.

To date more than 750,000 families have received foreclosure counseling as a result of NFMC Program funding. Late last month NeighborWorks reported that NFMC Program clients in foreclosure were 60 percent more likely to get out of foreclosure than homeowners who did not receive foreclosure counseling.

Speaking at NeighborWorks Symposium, Federal Reserve Governor Calls for Holistic Approach to Community Stabilization

With the downturn in housing affecting communities in a variety of ways, there is no one-size-fits-all strategy to fix deteriorating neighborhoods, said Federal Reserve Governor Elizabeth A Duke at the NeighborWorks Symposium on Community Stabilization held December 9 in Maryland.

“Because of these variations, a stabilization strategy that is effective in an industrial city facing high unemployment is unlikely to suit a suburban community where employment has remained relatively stable,” said Governor Duke.

Her observations were made first hand, as she toured the country to see how the economic crisis was impacting communities, how NeighborWorks was responding, and how the Reserve Banks were assisting communities under stress and the organizations that serve them. Governor Duke is a member of the NeighborWorks America Board of Directors and represents the Federal Reserve in a partnership with NeighborWorks America to reduce the impact of foreclosures in low- and moderate-income communities.

Governor Duke shared many lessons learned along the way; the first among them being that the effects of foreclosure on a community largely depends on the strength of the area’s underlying economy.

In some economically weaker communities, like Detroit, Cleveland and Indianapolis, the increased rates of foreclosures and the related economic downturn have hastened a cycle of vacancy and decreasing property values, said Governor Duke.

Communities with strong underlying economies have not been immune to the destabilizing effects of high foreclosure rates either. In the more vibrant communities of California, Florida, Arizona and Nevada, for example, there were very high rates of new home construction and speculative investments that resulted in unsustainable price escalation, Governor Duke said.

With so many influences exacerbating the foreclosure crisis across the country, Governor Duke said a holistic approach to community stabilization is key.

“After visiting with community organizations and seeing their work first-hand, it is clear to me that the most effective community stabilization approaches look beyond homes and mortgages,” said Governor Duke. “Successful community stabilization requires a broader vision of community, one that factors in the many elements that make a neighborhood a desirable place to live.”

She cited several examples of what this more holistic approach looks like across the country. Though tailored to meet the needs of the particular community, there is one thing all successful approaches have in common: organizational capacity.

The Governor highlighted efforts by NHS of Chicago, a NeighborWorks America member, as one of the “finest examples” organizational capacity. In the mid-1990s, NHS of Chicago identified predatory lending as a threat to the neighborhoods it served. In collaboration with the City of Chicago, the Federal Reserve Bank of Chicago, and many others, NHS formed the first Home Ownership Preservation Initiative (HOPI). This initiative became the model for foreclosure prevention and has been replicated across the country. Because of this experience, NHS was well-prepared to assist Chicagoans in the recent housing market downturn.

Governor Duke cautioned that many communities are facing the issues of vacancy, abandonment, and decay for the first time, and these communities need help to grow the human and financial capital required to address neighborhood decline. Organizational capacity needs time to be developed she said.

“As your attendance at this Training Institute demonstrates, there is a strong appetite among community organizations for information, training, and leadership development. And I am encouraged by your dedication,” said Governor Duke.

Read speech

About 25 Percent of HAMP Homeowners in Default Again

Data from the Treasury Department indicate that more than 25 percent of homeowners who have received assistance from the Home Affordable Modification Program (HAMP) are behind on their new mortgage payments. DSnews.com picked up the statistic from Assistant Treasury Secretary Herbert Allison’s testimony before a congressional oversight panel, in which he stated that just “73 percent of borrowers are current in their trial plan payments.”

NeighborWorks America believes that one way to reduce the default rate is for homeowners to receive the lowest sustainable mortgage payment possible when they rework their mortgages. Foreclosure counseling also greatly increases the chances that homeowners will be successful in their efforts to keep their homes.

In a report released in November, NeighborWorks America found that homeowners who received loan modifications through the National Foreclosure Mitigation Counseling (NFMC) Program lowered their mortgage payments significantly more than homeowners who received loan modifications without NFMC Program counseling.

NFMC Program clients, with the help of their counselors, secured loan modifications that lowered their monthly mortgage payments $454 more than the clients who received modifications without foreclosure counseling, which results in an average annual savings of $5,448. The same report found that NFMC clients are 60 percent more likely to avoid foreclosure than homeowners who don’t seek counseling.

Read “Quarter of HAMP Mods in Default Again” at DSnews.com

Learn more about the NFMC report in the NeighborWorks newsroom.

Two Newly Chartered NeighborWorks Organizations Celebrate their Affiliation in the Northeast District

Asian Americans for Equality (AAFE) in New York City and St. Joseph’s Carpenter Society in Camden, New Jersey, each recently held events to mark their affiliation with NeighborWorks America. Both highly accomplished organizations, they represent the first new affiliations in the Northeast district since 2002 and significantly expand NeighborWorks’ reach into underserved communities.

NeighborWorks America COO Eileen Fitzgerald noted that “St. Joseph’s represents the kind of excellence in community stabilization, revitalization and development that characterized the NeighborWorks network across the country.”

“St. Joseph’s Carpenter Society has helped thousands of New Jersey residents purchase and maintain their homes and they will be a tremendous asset to the NeighborWorks America network in our state,” said U.S. Senator Robert Menendez. “Their proven track record of educating potential home buyers will complement NeighborWorks’ efforts in improving the quality of life of working families. I congratulate St. Joseph’s for their revitalization projects which have improved the lives of so many children and families, andhope this partnership will serve to expand their efforts in promoting safety, financial stability and homeownership opportunities in Camden neighborhoods.”

Joined by District Director Deborah Boatright and several other prominent local elected officials, Congresswoman Nydia M. Velázquez offered her congratulations to AAFE. “By joining forces with NeighborWorks, AAFE will have additional funding and support for their efforts to create equal opportunities for all New Yorkers. I am committed to working with AAFE to address the shortage of affordable housing, increase financial literacy and improve lending practices. With unemployment rising above 10 percent and families struggling to make ends meet, this help is needed in New York City now more than ever.”

Read more in the NeighborWorks Newsroom.

NeighborWorks Joins Senator Reid and Other Officials at Nevada Event to Stop Foreclosure Fraud

The state of Nevada has the highest foreclosure rate in the country, making it a prime breeding ground for foreclosure rescue scammers out to take advantage of struggling homeowners. Last week Senator Harry Reid of Nevada joined state and federal officials to launch a Stop Foreclosure Fraud campaign, and NeighborWorks America was invited to speak.

“Each day, families are losing their homes or equity and their fair share of the American Dream,” Senator Harry Reid said at the event, which was reported in the Las Vegas Sun . “As foreclosures rise, so do instances of fraud.”

“It’s quite regrettable that such a campaign is necessary,” said Marietta Rodriguez, NeighborWorks America’s deputy director of National Homeownership Programs and Lending.

NeighborWorks America launched a similar national campaign in October and is currently traveling the country educating homeowners about loan modification scams. This Nevada effort is a separate campaign focused solely on the state’s foreclosure problem.

Read more.