NeighborWorks: Job Loss Affects More Than Half Of Borrowers Facing FC

Posted by Orb Staff on June 01, 2010 No Comments
Categories : Mortgage Servicing

eight percent of homeowners who received foreclosure counseling through the National Foreclosure Mitigation Counseling (NFMC) program reported the primary reason they were facing foreclosure was reduced or lost income, according to the program's administrator, NeighborWorks America. The news is found in NeighborWorks' fifth [link=http://www.nw.org/network/nfmcp/documents/CongressionalReportandAppendices.pdf]Congressional report[/link], which outlines NFMC program activity through Jan. 31. Over the course of the NFMC program, which began in January 2008, the percentage of homeowners who cited reduced or lost income as the primary reason they were facing foreclosure has steadily increased. In the November 2009 Congressional report, 54% of NFMC-counseled homeowners reported reduced or lost income as the main reason for default; as did 49%, 45% and 41% in the June 2009, February 2009 and October 2008 reports, respectively. These steady increases parallel the nation's unemployment rate, which until the November 2009 employment report, had marched upward since October 2008. "While Congress and state governments have stepped up and extended unemployment benefits to help families survive this tough economic climate, it's time for mortgage servicers and investors to make meaningful accommodations for homeowners facing foreclosure,’ says Ken Wade, CEO of NeighborWorks America. ‘If they don't, we'll see even more empty houses and devastated neighborhoods in our communities." The report also found that 62% of all NFMC clients held a fixed-rate mortgage. Forty-nine percent of clients held a fixed-rate mortgage with an interest rate below 8%. As of May 24, more than 967,000 families have received foreclosure counseling as a result of NFMC program funding. In October 2009, NeighborWorks reported that NFMC program clients in foreclosure were 60% more likely to avoid foreclosure than homeowners who did not receive foreclosure counseling. SOURCE: [link=http://www.nw.org/network/newsroom/pressReleases/2010/netNews052710.asp]NeighborWorks America

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