“Demand for funding is twice the money available”
Washington – NeighborWorks America today announced that nearly $40 million has been awarded to 21 state housing finance agencies (HFAs), 19 HUD-approved housing counseling intermediaries, and 60 community-based NeighborWorks organizations to provide counseling to families and individuals facing the threat of foreclosure.
The foreclosure rate has slowed, but financial challenges remain for many homeowners around the United States due to the national housing price recovery bypassing a number of communities, especially minority communities. Research from a variety of sources show that minority communities were the most severely affected by the housing bubble and have not benefited from the nationwide increase in home prices that has averaged more than four percent for several years.
Given those data, it’s important that NFMC funds reach homeowners who may face foreclosure. A study prepared by the Urban Institute for NeighborWorks America looked at the effectiveness of the NFMC program and found that homeowners who work with NFMC counselors were nearly twice as likely to cure a serious delinquency or foreclosure, and nearly three times as likely to receive a modification cure.
The foreclosure prevention work done by housing counselors funded by the NFMC program will significantly help these families. It is estimated that more than more than 122,000 families facing foreclosure will be directly assisted with this tenth round of NFMC funding.
The extent of the foreclosure crisis is evident by the strong request for NFMC funding from the housing counseling community. Demand for NFMC grant funds approached $84 million, or more than twice the amount of money that was available in this program round.
In total, more than 840 nonprofit counseling agencies and local NeighborWorks organizations across the country are expected to be engaged in the NFMC Program as a result of these awards. These organizations provide invaluable, free assistance to families at risk of losing their homes, determine homeowner eligibility for the various state and federal foreclosure prevention assistance programs, help homeowners understand the complex foreclosure process, and identify possible courses of action so their homeowner clients can make informed decisions and take action.
In addition to the families directly helped by counselors funded through the NFMC program, many more will be helped by the training of foreclosure counselors, provided through the NFMC Program. NeighborWorks expects to train 1,600 counselors with this round of NFMC funding.
NeighborWorks America also today released its 13th report to Congress, an analysis summarizing foreclosure counseling successes and challenges faced by NFMC Program counselors.
NFMC foreclosure prevention funding supports counseling that helps families through the long and complicated foreclosure process. NeighborWorks America believes that a number of these families might not have fallen into foreclosure if they had the benefit of NeighborWorks pre-purchase housing counseling and education prior to becoming homeowners.
Research conducted for NeighborWorks America on the effectiveness of NeighborWorks pre-purchase housing counseling and education found an average 33 percent decline in serious mortgage delinquency for homeowners who received NeighborWorks pre-purchase guidance compared to similar homeowners who didn’t receive the same NeighborWorks pre-purchase help. Read the full research.
SOURCE: NEIGHBORHOOD WORKS