News Release

August 12, 2010

Contact: Doug Robinson, 202-220-2360, drobinson@nw.org
Erin Angell Collins, 202-220-6317, ecollins@nw.org

More Than One Million Homeowners Counseled
by National Foreclosure Mitigation Counseling Program
Homeowners Facing Foreclosure Can Seek Help by Visiting FindAForeclosureCounselor.org

Washington, D.C. – Today NeighborWorks America announced that more than 1,000,000 homeowners facing foreclosure have received much-needed counseling thanks to the Congressionally-funded National Foreclosure Mitigation Counseling (NFMC) Program.

At a time when foreclosures continue to significantly affect the housing market and the national unemployment rate hovers around 9 percent, foreclosure intervention counseling provided by NFMC Program-funded nonprofit housing counseling organizations is helping homeowners across the country find a solution to foreclosure and receive indispensable information and guidance.

“While more than 1,000,000 homeowners have received foreclosure intervention counseling thanks to the foresight of Congress (especially the Transportation, Housing and Urban Development (THUD) appropriations subcommittees) and the hard work of more than 1,700 NFMC-funded counseling organizations, an additional 4 million homeowners are expected to face foreclosure in 2010. We continue to reach out to all homeowners who may face foreclosure to make them aware that foreclosure intervention counseling is available and offered for free at NFMC-funded counseling organizations across the country,” said Ken Wade, CEO of NeighborWorks America.

According to a recent NFMC report, 58 percent of homeowners facing foreclosure report the primary reason as job loss and reduced income. While the main reason for foreclosure has changed since 2007, when homeowners primarily faced foreclosure because of monthly mortgage payment increases due to interest rate hikes, the result is the same: foreclosures are hurting homeowners and communities nationwide.

“As families face unaffordable mortgage payments and the prospect of foreclosure, housing counselors are a valuable resource to help homeowners understand their options and obtain a fair modification from their lenders,” said Senate THUD Chairwoman Patty Murray (WA). “So far, one million homeowners, including 13,400 from Washington State, have received counseling through NFMC. This is an important milestone, but we know the work to help families being foreclosed on is far from complete. I am proud to support this program that helps families get back on their feet. And I am going to continue working with NeighborWorks to help our families and communities recover from this economic crisis that has devastated so many. ”

“I am proud to support funding for Neighbor Works’ National Foreclosure Mitigation Counseling (NFMC) program in the FY11 Transportation, Housing and Urban Development funding bill, as I have for the past three fiscal years,” said House THUD Chairman John Olver (MA). “The FY11 legislation includes $113,000,000 for foreclosure counseling—a program which has aided one million families to date. Data has shown that counseled homeowners were approximately 1.6 times less likelyto face a foreclosure completion than those who had not benefited from the NFMC program. By funding and supporting the NFMC, fewer families will find themselves facing removal from their homes and will gain knowledge of how to move forward financially. ”

Simply put: counseling works. According to an independent evaluation of the NFMC Program by the Urban Institute, homeowners who received counseling through the Program were 60 percent more likely to avoid losing their home to foreclosure than homeowners who do not seek counseling. NFMC Program clients were more likely to receive a loan modification, and on average, saved $454 more on their monthly mortgage payments per month, than homeowners who received modifications but did not work with a counselor.

“The evaluation findings speak volumes about the value of counseling and the vital role counselors play in helping homeowners find a solution to foreclosure,” said Wade.

Homeowners who would like to receive free foreclosure counseling from a NFMC Program-funded counseling organization in their community can visit www.findaforeclosurecounselor.org.

About the National Foreclosure Mitigation Counseling Program

In December 2007, NeighborWorks America was named in the FY2008 Consolidated Appropriations Act (P.L. 110-161) to administer the first round of $180 million in grant funding through the National Foreclosure Mitigation Counseling Program. On July 30, 2008, Congress passed the Housing and Economic Recovery Act of 2008 (P.L. 110-289), which appropriated an additional $180 million to this effort.

On March 11, 2009, President Obama signed the Omnibus Appropriations Act of 2009 (P.L. 111-8), which appropriated $50 million to NeighborWorks America to continue the National Foreclosure Mitigation Counseling Program. The third appropriation provided funds for foreclosure counseling, training for foreclosure counselors (up to $5 million), and administrative expenses (four percent) associated with running the NFMC program.

On December 16, 2009, the Consolidated Appropriations Act of 2010 (P.L. 111-117) appropriated an additional $65 million to the program, including $59.4 million for counseling. This fourth appropriation also provided training for foreclosure counselors (up to $3 million), and administrative expenses (four percent) associated with running the NFMC program.

For more information about the NFMC Program, visit www.nw.org/nfmc.