To date, the National Foreclosure Mitigation Counseling (NMFC) Program has provided 762,284 struggling homeowners with foreclosure prevention counseling, and according to a recent study, these homeowners are significantly more likely to keep their homes than those who try to go it alone. According to NFMC’s fourth report to Congress, troubled borrowers who receive foreclosure prevention counseling are 60 percent more likely to avoid foreclosure than borrowers who don't receive counseling. The report also found that 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 findings announced today demonstrate the real impact foreclosure counseling can have for families facing foreclosure,” said Ken Wade, CEO of NeighborWorks America. “Thanks to the hard work of nonprofit, HUD-approved housing counseling agencies around the country, and the expertise of their certified counselors, families are less likely to lose their homes to foreclosure and receive substantially better mortgage modifications, significantly reducing the likelihood of falling behind again on their mortgage.”
In an interview with the Washington Post on the report, NeighborWorks America COO Eileen Fitzgerald said that since the beginning of the crisis, relationships have developed between nonprofit counseling agencies and lenders that can speed the process.
“While it is still a challenge in being as responsive as we would like, it is better than what the homeowner faces,” alone Fitzgerald told the Post.
NeighborWorks America, who administers the $360 million government-funded program, commissioned the Urban Institute to conduct the study on the effectiveness of NMFC counseling efforts. The report covers counseling activity reported by program grantees as well as counselor training efforts provided by NeighborWorks between March 1, 2008 and August 18, 2009. The report also details the NFMC Program’s role in the Making Home Affordable program and the successes and challenges counselors face when helping homeowners avoid foreclosure.
Read more about it in the NeighborWorks newsroom.
View Washington Post article.
Download the report at www.nw.org/nfmc.
