NeighborWorks America, the administrator of the National Foreclosure Mitigation Counseling (NFMC) program, says a new report has found that the odds of curing a foreclosure – and potentially avoiding losing a home – is 1.7 times larger for a homeowner who works with an NFMC counselor than for a homeowner who does not receive such counseling.
Homeowners who obtain a mortgage modification through the NFMC program counseling save an average of $555 per month through lower payments, compared to savings of just $288 per month for homeowners who do not work with an NFMC program counselor, NeighborWorks says.
Also, the re-default rate for homeowners counseled through the NFMC program was better than that for homeowners who did not receive NFMC counseling. The NFMC report estimates that, for a group of typical NFMC clients, 64% of counseled homeowners who received a default-curing mortgage modification remained out of serious delinquency or foreclosure after eight months. In contrast, only 51% of these loan modifications would have avoided becoming seriously delinquent or entering foreclosure without NFMC program counseling services.
The report additionally suggests that the likelihood of curing a foreclosure was better when an NFMC program counselor was involved, even if the homeowner had been in foreclosure for many months. For a group of typical NFMC program clients whose loans enter foreclosure, an estimated 555 of these foreclosures would cure within 12 months of when the foreclosure started with the help of an NFMC program counselor, compared to only 38% otherwise.