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Housing Counselors Report Substantially Improved Communications with Servicers

HandGrabbingHouseWhile housing counselors across the country report improved communications with servicers in the area of helping struggling borrowers avoid foreclosure, there is still more work to be done, according to a report released Thursday from the National Foreclosure Mitigation Counseling (NFMC) program.

NFMC is a congressionally-funded effort launched in December 2007 to address the foreclosure crisis by making more housing counselors available to families at risk of losing their homes to foreclosure. In slightly less than eight years, NFMC has helped approximately 1.9 million homeowners understand their foreclosure prevention options. The funds are distributed by Washington, D.C.-based community development non-profit and grant maker NeighborWorks America to grantee organizations, which in turn provide the housing counseling services. The report released Thursday was NFMC's 11th report to Congress.

9-24 NFMC Graph 1“Servicer interactions with counselors have dramatically improved from a few years ago,” said Nicole Harmon, NFMC vice president. “But we would like to see the trend line continue to improve, not flatten out. That is what would be best for homeowners and counselors.”

The challenge most reported by counselors in NFMC's report was efficient and timely communication with servicers (38 percent), which is down slightly from 40 percent in the NFMC's report from October 2013. Frequent staff changes among servicers and changing points of contact resulted in problems for counselors when trying to contact servicers.

Servicers have greatly reduced staff numbers in loss mitigation departments, however, due to substantial declines in serious defaults and foreclosure cases. Some experts are predicting that foreclosure cases and defaults could rise again due to an increase in costs associated with loan modifications.

9-24 NFMC Graph 2Despite the challenges for counselors communicating with servicers, substantial program successes have been reported. According to the Urban Institute, the following outcomes have been associated with NFMC program counseling:

Homeowners who receive NFMC program counseling are almost three times more likely to receive a loan modification than homeowners who do not have the counseling

The chances of a struggling homeowner's ability to cure a serious delinquency or foreclosure greatly increased with counseling from NFMC

Homeowners who receive counseling are one and a half times more likely to keep their loans current (not have their loans enter troubled status) after receiving a loan modification

Click here to see the NFMC's full report.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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