NeighborWorks says counselors increase odds of modification, cut redefaults
Distressed homeowners working with a housing counselor are nearly twice as likely to receive a modification and are much more likely to stay out of redefault, according to a loss mitigation report from NeighborWorks America. NeighborWorks was appointed by Congress to administer the National Foreclosure Mitigation Counseling program, and the report is an analysis of the program through December 2009. The House of Representatives is debating a bill that if passed into law would provide federal funds to nonprofit counseling agencies and nonprofit attorneys to help homeowners facing foreclosure. Homeowners receiving a modification through an NFMC counselor saved an average $555 per month on their mortgage payments, compared to $288 a month for those who don't. Redefault rates for homeowners counseled through the NFMC program bested homeowners who received a modification without help. According to the report, 64% of counseled homeowners remained out of serious delinquency or foreclosure after eight months, compared to 51% for those who did not receive counseling. "The NFMC program results clearly demonstrate the value of counseling," NeighborWorks America CEO Ken Wades said. "The findings announced today illustrate the real household and economic benefit foreclosure counseling can have for families facing foreclosure." Write to Jon Prior.