While the foreclosure rate is slowing as a trend nationwide, some pockets are still struggling to recover eight years after the housing crash. The Congressionally-funded National Foreclosure Mitigation Counseling (NFMC) program has just provided another $40 million to assist in the recovery effort for those areas still devastated by foreclosures and where homeowners are still struggling to make mortgage payments.
According to NeighborWorks America, the latest (10th) round of NFMC funding was awarded to 21 state housing finance agencies, 19 HUD-approved housing counseling intermediaries, and 60 community-based NeighborWorks America organizations. The money will go to help provide counseling for at-risk homeowners who are working with their servicers to avoid foreclosure.
It is estimated that approximately 122,000 families will be directly assisted with the latest round of NFMC funding. A study conducted by the Urban Institute showed that homeowners who work with NFMC counselors were nearly twice as likely to cure a serious delinquency or foreclosure, and three times as likely to receive a modification cure.
“The extent of the foreclosure crisis is evident by the strong request for NFMC funding from the housing counseling community,” NeighborWorks America said. “Demand for NFMC grant funds approached $84 million, or more than twice the amount of money that was available in this program round.”
“The extent of the foreclosure crisis is evident by the strong request for NFMC funding from the housing counseling community.”
In March, the NFMC program passed a milestone when the two millionth homeowner facing foreclosure received counseling through the program in the eight years of the program’s existence. NeighborWorks America NFMC funds to grantee organizations, which in turn provide the counseling services. The Urban Institute found that homeowners who had been through NFMC counseling and then received a modification saved an average of $4,980 annually.
In addition to directly helping families, NFMC funding also goes toward training foreclosure prevention counselors. According to NeighborWorks America, approximately 1,600 counselors are expected to be trained with the latest round of NFMC funding. At the same time the latest round of NFMC funding was announced, NeighborWorks America released its 13th report to Congress, which summarizes the challenges and successes faced by foreclosure prevention counselors in the NFMC program.