Now, thanks to a new report from NeighborWorks America on the "National Foreclosure Mitigation Counseling Program Evaluation: Preliminary Analysis of Program Effects," we can once again state that COUNSELING WORKS.
The National Foreclosure Mitigation Counseling (NFMC) program is a federally-funded program that is designed to support the rapid expansion of foreclosure intervention counseling in response to the nationwide foreclosure crisis. MN Housing (Finance Agency) has been a recipient of NFMC funds... that support the work of the MN Home Ownership Center's network of non-profit Foreclosure Counselors.
The analysis presented in the report is based on a sample of close to 180,000 loans held by homeowners that received NFMC-funded foreclosure prevention counseling. Here are just some of the findings:
- The NFMC program was effective at helping homeowners cure an existing foreclosure. During the first two years of the program, the relative odds of counseled homeowners curing their foreclosure were 1.7 times greater than if they had not received NFMC counseling. The resulting difference in the cure rate means that an estimated 32,000 more NFMC clients cured their foreclosure by the end of December 2009 than would have occurred without receiving services from NFMC counselors.
- Loan modifications received by NFMC clients resulted in significantly lower monthly mortgage payments than would have been received without the help of the program. Lower monthly payments may help reduce the likelihood of a subsequent recurrence of borrower mortgage problems. On average, we estimated that NFMC clients who received loan modifications in the first two program years reduced their monthly payments by $267 more than they would have without NFMC counseling.
- Homeowners who obtained a loan modification that allowed them to cure an existing serious delinquency or foreclosure were much more likely to remain current on their mortgage if their loan modification was obtained with help from NFMC counseling. For clients counseled in 2008, counseling produced a 45 percent increase in the relative odds that a post-counseling modification would be sustained through 2009.
There are many more advantages to Foreclosure Counseling cited in the full report.
Here in Minnesota, research conducted by the Federal Reserve Bank of Minneapolis showed that Foreclosure Counseling cost just under $400 per household - $400 to save homeowners an additional $3,204 per year, improve their odds of curing foreclosure and increase the long-term success of a modification... plus many other 'intangible' benefits... seems like Foreclosure Counseling is a great investment in long-term housing stability for MN Families.
If you or someone you know is struggling with mortgage payments, help is available. Visit the MN Home Ownership Center's website for more information.