Washington, D.C.-based NeighborWorks America, one of the nation's largest community development corporations, announced that more than 1.8 million homeowners have received foreclosure prevention counseling through the association's National Foreclosure Mitigation Counseling Program (NFMC) as of July 31, 2014.
Distressed homeowners have utilized local nonprofits, national intermediaries, and state housing finance agencies to receive housing counseling through the NFMC Program, which has facilitated the awarding of more than 13,300 scholarships to pay for counselor training and the certification in foreclosure prevention counseling for more than 10,200 people.
"The rate of home foreclosure is down dramatically from its peak across the country, but there still are hundreds of thousands of homeowners in hardest hit parts of the country who would benefit from working with nonprofit housing counselors to find the best solution to their mortgage troubles," said Chuck Wehrwein, acting CEO for NeighborWorks America.
An NFMC Program Congressional Report determined that low mortgage rates hovering around 4 percent for several years now have not been helpful to approximately 18 percent of homeowners. The report said that an average of about three in five homeowners who approach the NFMC for foreclosure prevention counseling have a mortgage interest rate of 8 percent or greater.
"A number of factors keep homeowners from reducing their mortgage interest rate – whether they face foreclosure or not – according to research conducted by the University of Chicago in partnership with NeighborWorks network member, Neighborhood Housing Services of Chicago," Wehrwein said. "The report found that many homeowners didn’t believe that the programs that they heard about actually could deliver. Dispelling the myths about foreclosure prevention programs is a key benefit of working with an NFMC counselor."
Homeowners participating in housing counseling through NFMC are three times more likely to save money through loan modification and twice as likely to get current on their mortgage payments without a loan modification, according to an analysis of NFMC by the Urban Institute. The UI found in its analysis that homeowners who worked with a housing counselor in the NFMC program to avoid foreclosure with a loan modification saved an average of about $5,000 per year.