A new study for NeighborWorks America by the Urban Institute has found that homeowners have saved tens of millions of dollars annually because of the National Foreclosure Mitigation Counseling program. Specifically, homeowners working with NFMC program counselors are nearly three times more likely to obtain a money-saving loan modification, are nearly twice as likely to get their mortgage back on track without a modification, about 60 percent less likely to re-default after curing a serious delinquency, and, if necessary, able to complete short sales faster than homeowners who don’t work with housing counselors. The research is based on analysis of nearly 240,000 homeowners with outcomes observed through June 2013. More than 1.8 million homeowners have been helped by the NFMC program, administered by NeighborWorks America since it began in March 2008.
“If there was any lingering doubt about the value of NFMC counseling for homeowners and the broader real estate industry, the research announced today should put those doubts to rest,” said NeighborWorks America acting CEO Chuck Wehrwein.
“Whether measured by benefits to homeowners through more likely mortgage modifications, sustainability of those modification or mortgage cures, the research answers all housing counseling benefit questions with a resounding ‘yes.’”
Housing industry better served
The research suggests benefits to servicers and to Realtors working with homeowners in default. The NFMC program consistently shows that homeowners were able to cure delinquent mortgages more frequently with the assistance of an NFMC counselor than owners who do not receive such help. As a result, servicers likely saved lost revenues by having performing loans back on their balance sheets.
Moreover, servicers should take note that homeowners who work with NFMC housing counselors are more likely to cure their mortgage without a modification than other homeowners in default.
“The bottom line for the servicing industry is that housing counseling saves them time and money,” said Wehrwein. “Servicers that increase their partnership with NFMC program counselors are benefiting their shareholders and mortgage customers.”