Today NeighborWorks America, the Congressionally appointed administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, announced that, based on a new report that analyzed the NFMC program through December 2009, the odds of curing a foreclosure, and potentially avoiding losing a home, is 1.7 times larger for a homeowner who works with an NFMC counselor than for a homeowner who doesn’t receive such counseling.
Homeowners who obtain a mortgage modification through the NFMC program counseling save an average of $555 per month through lower payments, compared to savings of just $288 per month for homeowners who don’t work with an NFMC program counselor.
The re-default rate for homeowners counseled through the NFMC program was better than that for homeowners who didn’t receive NFMC program counseling. The NFMC report estimates that, for a group of typical NFMC clients, 64 percent of counseled homeowners who received a default-curing mortgage modification remained out of serious delinquency or foreclosure after eight months. In contrast, only 51 percent of these loan modifications would have avoided becoming seriously delinquent or entering foreclosure without NFMC program counseling services.
These results are part of the latest program analysis produced by the Urban Institute for NeighborWorks America. The report covers NFMC program years 2008 and 2009.
“The NFMC program results clearly demonstrate the value of counseling,” said NeighborWorks America CEO Ken Wade. “The findings announced today illustrate the real household and economic benefit foreclosure counseling can have for families facing foreclosure.”
As a result of NFMC program funding, families who sought and received foreclosure counseling were provided much needed information, assistance and guidance to address their risk of foreclosure, which helped them find a solution to foreclosure. These foreclosure solutions sustain family and neighborhood stability and generally help the national housing market.
The report also found that the likelihood of curing a foreclosure was better when an NFMC program counselor was involved, even if the homeowner had been in foreclosure for many months. According to the report, for a group of typical NFMC program clients whose loans enter foreclosure, an estimated 55 percent of these foreclosures would cure within 12 months of when the foreclosure started with the help of an NFMC program counselor, compared to only 38 percent otherwise.
The NFMC program was created by Congress to address the nationwide foreclosurecrisis by dramatically increasing the availability of housing counseling for families at risk of foreclosure. Congress has appropriated $475 million to the NFMC program. Upwards of 1,700 counseling agencies operate under the program.
The report is available at: http://tinyurl.com/nfmcdecember. For additional information about the National Foreclosure Mitigation Counseling Program, visit www.nw.org/nfmc. Media inquiries should be directed to Douglas Robinson, 202-220-2360.
Homeowners who would like to receive foreclosure counseling from an NFMC program -funded counseling agency in their community can visit www.findaforeclosurecounselor.org.