Monday, January 10, 2011

Could This Man’s Home Been Saved by a Foreclosure Counselor?

NeighborWorks America has always encouraged homeowners facing foreclosure to reach out to a HUD-approved housing counseling agency to get help with a loan modification, because for some, going it alone can be too daunting. NPR recently featured the story of Laverl Nicholson, a homeowner who lost his Montana home to foreclosure despite a year and a half negotiating with his bank. NeighborWorks America recently published a report that showed this homeowner’s odds of keeping his home would have been much stronger had he sought professional assistance sooner.

"We encourage borrowers in distress to get in touch with a HUD-approved counseling agency as soon as possible in the process," Marietta Rodriguez, NeighborWorks America's national director for homeownership and lending, told NPR.

Rodriguez’s advice is grounded in solid research. A recent independent study by the Urban Institute, of the National Foreclosure Mitigation Counseling Program, a special congressionally funded program administered by NeighborWorks America, shows the tremendous difference working with housing counselor can make.

According to the Urban Institute report, homeowners who worked with HUD-approved housing counseling agencies that got NFMC funding were 70 percent more likely to resolve an existing foreclosure than non-NFMC clients. They also reduced their monthly payments by $267 more monthly than they would have without NFMC counseling and were better able to sustain their new payments than those going it alone.

NeighborWorks is now working with the homeowner featured in the NPR story to determine if he has a viable wrongful foreclosure claim, but the lesson here is that foreclosure counseling works and it should be sought sooner rather than later.