Additional Funding for Foreclosure Mitigation Counseling Program

By Jeanne Fekade-Sellassie
director, NeighborWorks America National Foreclosure Mitigation Counseling Program

Today, NeighborWorks America announced that $70.1 million has been awarded to 30 state housing finance agencies (HFAs), 17 HUD-approved housing counseling intermediaries, and 72 community-based NeighborWorks organizations to provide counseling to families and individuals facing the threat of foreclosure.  Just one month after the seventh round of National Foreclosure Mitigation Counseling (NFMC) Program funds were appropriated, communities across our country will be able to put the funds to immediate use.

At a time when foreclosures continue to affect communities around the country and unemployment rates remain high, the need for the NFMC funding is critical.  Demand for these funds far exceeded the amount of funding available; eligible applicants requested over $105 million in NFMC grant funds.



In total, more than 1,200 nonprofit counseling agencies and local NeighborWorks organizations across the country are expected to be engaged in the NFMC Program as a result of these awards.  These organizations provide invaluable, free assistance to families at risk of losing their homes, determine client eligibility for the Making Home Affordable programs, help clients understand the complex foreclosure process, and identify possible courses of action so their clients can make informed decisions and take action.

To date, more than 1,560,000 families in all 50 states, Puerto Rico and Guam have received foreclosure counseling through the NFMC Program.  It is estimated that 193,000 families facing the threat of foreclosure will be directly assisted with this seventh round of funding.

In addition to the grant funding, the NFMC appropriations provide funding to train foreclosure counselors and to administer the program.  With these funds, NeighborWorks has conducted over 156 local, regional, and national trainings and has provided over 12,100 training scholarships and over 23,000 course completion certificates to individuals attending these trainings.  Nearly 5,800 participants have completed one or more of the three foreclosure e-learning courses developed with NFMC funds: Foreclosure Basics, Understanding and Applying Loss-Mitigation Tools, and Using Effective Practices to Improve your Foreclosure Counseling Program.  NeighborWorks expects to train 2,000 counselors with the seventh round of NFMC funding.

Learn more at http://nw.org/network/foreclosure/nfmcp/round7.asp 

Foreclosure Filings Down but Help Still Needed

By Douglas Robinson, media relations manager, NeighborWorks America

Housing counselors at NeighborWorks
affiliate Wyoming Housing Network helped
this couple save their home from foreclosure

RealtyTrac recently reported that new foreclosure filings in January 2013 dropped to the lowest level since April 2007, and that's a big deal and a good sign that many homeowners' financial positions are stabilizing. But the news from RealtyTrac also showed that more than 150,000 new foreclosure related notices were filed in January. These notices are on top of the nearly 1.5 million households who received a foreclosure notice in 2012.

These families need to be directed to the right kind of help and that's where trained housing counselors come in. According to data from the National Foreclosure Mitigation Counseling (NFMC) program, homeowners who receive help from a counseling agency that is a part of the NFMC program are more likely to obtain a mortgage modification, and get a better new mortgage rate if their loan is modified.

This week, the NeighborWorks Training Institute will convene in Atlanta and dozens of nonprofit professionals will take courses in foreclosure mediation, while dozens more will attend courses toward certification in homebuyer education. Homebuyer education prior to making the home purchase helps ensure that homebuyers know the full financial responsibilities of homeownership. NeighborWorks America believes that if more homeowners had the opportunity to work with a homeownership counselor prior to the housing crisis, the crisis would be much less severe.

More information about the National Foreclosure Mitigation Counseling program can be found at: www.nw.or/nfmc. The full report to Congress on the NFMC program is available on the NeighborWorks America website. 

Information about NeighborWorks homeownership programs can be found at: www.nw.org/homeownership

NHS of Greater Cleveland: A Port in the Foreclosure Storm

This blog is part of our 35^th Anniversary Celebration series, highlighting NeighborWorks affiliates which are celebrating milestone years marking either their membership in the network or their incorporation as an organization. This month, NHSGC is celebrating 15 years since incorporation. 

By Brittany Hutson, NeighborWorks
America Public Relations fellow

The 2008 housing crisis caused many to wonder if buying a home could still be considered the "American dream." In spite of all the uncertainty about the housing market, Neighborhood Housing Services of Greater Cleveland, Inc. (NHSGC) has remained steadfast in its mission to assist their clients in becoming homeowners. “A lot of people will say Cleveland and Slavic Village was the epicenter of foreclosure, mortgage fraud, flipping, etc.,” says Executive Director Lou Tisler. “But it was also the epicenter for solution based programs for the foreclosure crisis.”

Tisler says that the foreclosure crisis gave NHSGC an opportunity to prove their value and leadership and that the crisis required the organization to be more flexible and creative. The organization was selected for the Ohio Foreclosure Prevention Task Force, accumulated nearly $5.6 million to assist people in need with the NeighborWorks Collaborative of Ohio, and provided testimony at congressional hearings.

Dave Wilson came to NHSGC to avoid foreclosure. He had
suffered an injury and struggled to make ends meet. By working with
NHSGC, Wilson was able to get an affordable loan modification.

This month, the Cleveland, Ohio organization celebrates 15 years as part of the NeighborWorks network.  NHSGC offers a number of programs to “help people get, fix and keep their homes,” says Tisler. These programs include a homebuyer education program, a down payment assistance program, providing rehab loans to those who cannot get lending from traditional banks, a sustainability program that focuses on foreclosure prevention and intervention; mortgage counseling; and EnergYOU, which helps clients and residents conserve their budgets for utilities and food costs. The organization serves primarily low-to-moderate income people, as well as people with moderate-to-high income that seek foreclosure prevention assistance. “Our clients are usually underserved, under-banked and under-represented in the housing market,” says Tisler. The organization serves up to 3,500 people per year.

Raylene Hood reached out to NHSGC for assistance in saving her home. A
NHSGC counselor helped her apply for rescue funds to bring her mortgage current.
NHSGC also helped Hood when she needed emergency repairs on her roof.

Though NHSGC has seen its fair share of challenges in home equity, lack of access to capital, and limited lending, Tisler praises his staff of 16 for their motivation and commitment to serving the organization’s targeted community. “The staff [has been] the greatest asset to the organization,” says Tisler. “Our staff has gotten us to a solution based delivery system. To see them come in everyday and make what they do happen is incredible.”

In addition to the staff, Tisler says that being a part of the NeighborWorks network is “an incredible, valuable asset for the organization and the people we serve.” He adds, “As a network member, NHSGC has access to best practices and funding, and can share experiences and ideas with other network organizations. It is truly a network of excellence.”

CVC Showcases What Can Happen to Foreclosed Properties When Government and Private Sector Work Together

Community Ventures Corporation, our affiliate in Kentucky, in partnership with the Governor’s Office, the Attorney General’s Office, Kentucky Department of Local Governments, Kentucky Housing Corporation, and other partners showcased what can happen to foreclosed properties when government and the private sector work together.

Attorney General Conway; Marshall Crawford,
NeighborWorks America; Governor Beshear; Kevin Smith,
Community Ventures Corporation

Today, the Hartford Place Apartments were highlighted as congratulations were made and partnerships were celebrated with all of the partners at CVC’s headquarters in Lexington. Attorney General Conway; Marshall Crawford, director, NeighborWorks America Southern District; Governor Beshear and Kevin Smith, president and CEO of CVC, spoke at the event.

CVC’s purchase of Hartford Place coincides with the Commonwealth’s neighborhood revitalization mission of acquiring and providing safe and decent affordable rental opportunities to low and middle income residents and returning foreclosed properties to a useful community asset.

The project consists of three buildings with a total of 49 units. The property, which was a foreclosed property for sale by lender, had only a 70 percent occupancy rate and needs rehab due to the poor condition of many of the units. Sixteen currently vacant units will be completely rehabbed, more efficient HVAC systems will be installed, one unit will be updated to meet handicap accessible criteria and resident services, such as financial literacy and homebuyer education, will be provided. All units will be rehabbed as they become vacant.

Kevin R. Smith, president and CEO of Community Ventures Corporation praised the public and private partnerships that made it possible for 49 families to have safe and affordable housing in Lexington. "Without all of these partners coming together, it couldn’t have happened," Smith said. "Families on Martha Court now have a place to call their own. Some of these folks have been through foreclosure and had to leave their home. Through this project, they have landed and can be successful as renters."

Foreclosure Counseling Nearly Doubles Chances of Mortgage Modification, Reduces Likelihood of Re-default by at Least 67 Percent

By Eileen Fitzgerald,
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 improved long-term sustainability of the borrower is led largely by the financial counseling that is a part of foreclosure prevention, not by the lower mortgage payment obtained. The personalized work nonprofit housing counselors do to help homeowners improve their overall financial situation had the greatest effect on a homeowner not falling behind again on their mortgages in the future.

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.

New York Housing Counselors and Partners Strategize Next Stage of Helping Homeowners Facing Foreclosure





Darryl Towns, Commissioner/CEO
NYS Homes and Community Renewal



With funding for an extensive network of foreclosure counseling and legal services in New York set to expire in December, housing counselors and their partners throughout the state recently met to strategize about a path forward.

“By 2011, we thought the crisis would be done,” remarked Hilary Lamishaw, of the NYS Coalition for Excellence in Homeownership Education, as she opened the daylong conference. “We don’t know what the service delivery system will look like, but regardless, homeowners are going to have to be served,” Lamishaw added.

Housing counselors and their partners had been gathering at regional meetings leading up to the conference, discussing what might happen in their communities post-funding, sharing best practices and lessons learned.

The conference, sponsored by the NYS Coalition for Excellence in Homeownership Education, the Empire Justice Center and NeighborWorks America, with funds provided by New York State Homes and Community Renewal, provided an opportunity to hear about trends and models from throughout the country. The models included effective triage, on-line intakes, weekly webinars, and technologies such as Hope Loan Port, which have brought new efficiencies in service delivery and cost in other states. Faced with the loss of federal and state funding, Community Development Corporation of Long Island, a local NeighborWorks affiliate, is planning to hold group foreclosure intervention sessions.



Housing counselors weigh in on major topics that will serve as a starting point
for a statewide foreclosure prevention plan.



Lou Tisler, executive director of Neighborhood Housing Services of Cleveland, discussed the positive long-term impact Ohio Governor’s Foreclosure Prevention Task Force has had in giving the issue the political cachet needed to innovate.

Faith Schwartz with the Hope Now Alliance emphasized that it is important to embrace technology so that the work gets done.

Josh Zinner with the New York Community Economic Development Advocacy Project noted that although unemployment may be the immediate trigger now for delinquencies, underneath is often a sub-prime or predatory loan that makes the homeowner at increased risk.

The need for a fair and honest approach to principal reduction was another recurring theme as the audience considered what might really help mitigate foreclosure.

Conference participants developed a series of recommendations to serve as a start of a statewide plan of action, including strategies addressing policy, outreach, fee-for-service and funding, statewide collaboration, and improving the efficiency of counseling and legal issues. Plans are also under way for the development of uniform homeowner education materials that can be accessed from a single point of entry.

“We are facing similar issues in Philadelphia so that is why I came,” said Allison Hughes of the Homeownership Counseling Association of the Delaware Valley. “I thought that morale would be low, but everyone here is upbeat and focused, and the discussion has been great.”

“It was a strong collaboration between government, the courts, housing counselors, legal services, and elected officials in New York State that built an effective response to foreclosure over the last three years. Now that funds are scarce, we will need that collaboration more than ever as we chart a new path on behalf of New York’s homeowners,” said Deborah Boatright, NeighborWorks America Northeast regional director.

Housing Partnership Network and Citi Foundation Launch Fund to Advance Innovations in Neighborhood Stabilization

Citi Foundation announced recently that it is committing $2.75 million to the Housing Partnership Network (HPN) to support the neighborhood stabilization efforts of community-based housing organizations in 10 metropolitan areas across the country. The Innovations in Neighborhood Stabilization and Foreclosure Prevention Initiative will provide the community based organizations with grants and other resources to support high-impact neighborhood revitalization projects over a two-year period. HPN has been a partner with NeighborWorks America and five other national organizations in neighborhood stabilization efforts through the National Community Stabilization Trust. HPN also collaborates with NeighborWorks America on the StrengthMatters Initiative.

Four NeighborWorks organizations will be a part of the Citi Foundation and HPN initiative:

Housing Development Fund will work to stabilize Connecticut cities with high rates of foreclosure by developing a cohort of “landlord entrepreneurs” who will play a significant role as owner-occupants in a new, coordinated financing and training model for the purchase, rehabilitation and responsible management of owner-occupied small multi-family properties.

HAP Housing will advance strategic neighborhood approaches for the stabilization of three low-income Springfield, Massachusetts neighborhoods hit hard first by the effects of foreclosures and abandonment, and then by a devastating F-3 tornado on June 1, 2011.

Neighborhood Housing Services of Chicago will implement a new model for advising homeowners through a network of Resolution Specialists who will work in partnership with the homeowner, lender, and servicer to modify mortgages through the new national Mortgage Resolution Fund effort.

Neighborhood Housing Services of New York City, Inc. (NHSNYC) in collaboration with the New York Mortgage Coalition (NYMC) and the Long Island Housing Partnership (LIDP) will create a foreclosure intervention program for existing homeowners who may qualify to own or rent their homes if prices were reset to current market valuations.

More than 1.1 Million Homeowners Counseled for Foreclosure



NeighborWorks America, the administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, announced that more than 1.1 million homeowners across the nation have received foreclosure counseling through the NFMC Program, according to the Program’s sixth Congressional report.

As of June 30, 2011, more than 1,168,062 homeowners in all 50 states, the District of Columbia and the U.S. Territories have received foreclosure counseling as a result of NFMC Program funding.

In December 2010, an independent analysis of the NFMC Program showed that NFMC Program clients in foreclosure were 1.7 times more likely to cure a foreclosure and potentially avoid losing a home, than homeowners who did not receive foreclosure counseling. In addition, NFMC clients who received loan modifications reduced their monthly mortgage payments on average by $267 more per month than they would have without NFMC counseling. This represents an annual savings of over $3,200 per homeowner.

The sixth Congressional Report also found that the largest share of foreclosure mitigation counseling provided by the NFMC Program has gone to assist struggling homeowners in the states hardest hit by delinquencies and foreclosures, such as California and Florida. Minority and low-income homeowners and neighborhoods, which have been disproportionately impacted by the foreclosure crisis, are well-served by the NFMC Program: 31 percent of NFMC Program clients were identified as racial minority homeowners, 20 percent were of Hispanic origin, and 66 percent were classified as low- income.

Homeowners who would like to receive foreclosure counseling can visit http://www.findaforeclosurecounselor.org/ to find a NFMC Program-funded counseling organization in their community.For more information about the NFMC Program, visit www.nw.org/nfmc.

NeighborWorks America Receives $1 Million Grant from the Rockefeller Foundation for Nonprofit Housing Counseling and Foreclosure Prevention

NeighborWorks America today announced that it received $1 million from The Rockefeller Foundation in support of infrastructure development and upgraded technical support for nonprofit housing counseling organizations. The grant will help to strengthen and supplement nonprofit housing counseling capacity and increase their efficiency and ability to help homeowners avoid foreclosure.

Specifically, the grant will help NeighborWorks America provide data management and technical support to nonprofit organizations using CounselorMax™ to manage homeowner client data and to deliver and track that information to the servicers through the HOPE LoanPort, a web-based tool developed by the HOPE NOW Alliance that streamlines loan modification applications on behalf of borrowers at-risk of foreclosure, allowing housing counselors to efficiently transmit completed applications to mortgage servicers. In addition, the grant will also support community-based outreach events for homeowners at risk of foreclosure.

“Homeowners and housing counselors need better technology to work through the complicated details and document requirements for a long-term, successful mortgage modification,” said Ken Wade, CEO of NeighborWorks America. “The support from The Rockefeller Foundation will improve the work of nonprofit organizations that have been slowed by a paper-based system and inefficient mortgage modification delivery process. As a result of these investments, counselors will be able to serve homeowners at risk of foreclosure more efficiently and effectively.”