Counseling Improves Mod Success, Nearly Doubles Payment Reductions

NeighborWorks America is the administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, which was implemented by Congress in January 2008. Based on a new report that analyzed the NFMC program in its first two years, through December 2009, the nonprofit group found that the odds of curing a foreclosure is 1.7 times greater for a homeowner who works with an NFMC counselor than for a homeowner who doesn’t receive counseling.


The analysis also revealed that homeowners who obtain a mortgage modification through the NFMC program lower their mortgage payments by an average of $555 per

month, compared to savings of just $288 per month for homeowners who don’t work with an NFMC program counselor. NeighborWorks says the national counseling program has helped individual homeowners save more than $6,000 annually.

In addition, the re-default rate for homeowners counseled through the NFMC program was better than that for homeowners who didn’t receive counseling. The NFMC report estimates that 36 percent of counseled homeowners who received a default-curing mortgage modification became serious delinquent again after eight months, compared to 49 percent of homeowners who received no program counseling.


http://www.dsnews.com/articles/counseling-improves-mod-success-nearly-doubles-payment-reductions-2010-12-20