Monday, December 19, 2011
Foreclosure Counseling Nearly Doubles Chances of Mortgage Modification, Reduces Likelihood of Re-default by at Least 67 Percent
CEO, NeighborWorks America
I’m excited to share with you today the results of a new report prepared by the Urban Institute on the consumer benefits of the National Foreclosure Mitigation Counseling (NFMC) Program.
The report shows that the NFMC program works incredibly well for homeowners and communities. Homeowners who received NFMC counseling were nearly twice as likely to obtain a mortgage modification as those who did not seek assistance from an NFMC foreclosure prevention counselor. Homeowners counseled through NFMC were at least 67 percent more likely to remain current on their mortgage nine months after receiving one.
The report also shows that homeowners received, on average, a mortgage modification that lowered their payment by $176 more per month, than homeowners who didn’t work with an NFMC counselor – a savings of close to $2,100 a year.This reduction in household expenses can free up funds for paying off debt, saving for college and meeting other needs.
The NFMC program also has benefits for mortgage servicers and investors. By significantly reducing the chance that a homeowner re-defaults after a mortgage modification, servicers are saved added expense. This tells us that increased servicer investment in partnerships with nonprofit counselors is a win for everyone.
If you’d like to learn more, I was recently interviewed about this report. See YouTube video.