Borrowers who receive foreclosure counseling are 1.6 times less likely to lose their homes to foreclosure than homeowners who do not receive counseling, according to a report issued by NeighborWorks America.
NeighborWorks, which administers the National Foreclosure Mitigation Counseling (NFMC) program, says NFMC clients were more likely to receive a loan modification than homeowners who did not receive counseling, and clients who received loan modifications lowered their mortgage payments significantly more than homeowners who received loan modifications without NFMC counseling.
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, NeighborWorks says.
"The findings announced today demonstrate the real impact foreclosure counseling can have for families facing foreclosure," says Ken Wade, CEO of NeighborWorks America.
While the report analyzes NFMC program data through Dec. 31, 2008, to date, more than 750,000 families have received foreclosure counseling as a result of NFMC program funding.
Through the fiscal-year 2008 Consolidated Appropriations Bill, Congress initially authorized $180 million for the NFMC program. An additional $180 million was appropriated on July 30, 2008, through the Housing and Economic Recovery Act of 2008, and the Omnibus Appropriations Act of 2009 appropriated another $50 million to the program in March of this year.
SOURCE: NeighborWorks America