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Financial Flash Newsletter

Foreclosure Update: National Program Mitigates the Crisis

In December 2007, Congress signed legislation authorizing $130 million to the National Foreclosure Mitigation Counseling (NFMC) Program responding to the advent of the sub-prime mortgage crisis. This funding was distributed to HUD Housing Counseling agencies to support direct service of loss mitigation, foreclosure prevention counseling.

Since 2007, Congress has authorized an additional $222.7 million to support these counseling efforts. The funding has made significant impact in sustaining homeownership.

OnTrack participates in this program through the statewide efforts of North Carolina Housing Finance Agency. OnTrack's Foreclosure Prevention Program's 98% success rate speaks locally to the national program's impact. Daily, our clients reap the benefits of this federal program.

As of August 18, 2009, the NFMC Program has funded 720,488 units of foreclosure mitigation counseling with 633,294 homeowners nationwide. According to data aggregated by NeighborWorks America, the following results / statistics relate to the national foreclosure crisis:

  • Roughly 39% of NFMC Program clients paid more than 50% of their income toward housing costs. Twenty percent (20%) paid more than 75% of their income on housing costs.
  • On average, it is estimated that NFMC Program clients who received loan modifications reduced their monthly payments by $454 more than they would have without NFMC Program counseling.
  • Fifty-four percent (54%) of homeowners seeking NFMC Program counseling reported the reason they are facing foreclosure was a reduction in or loss of income.
  • More than half of all homeowners (54%) receiving NFMC Program counseling services were fewer than 60 days late on their mortgage upon first contact with an NFMC Program housing counseling agency. Thirty-three percent (33%) were current on their mortgage at intake. However, more than one in five (22%) was over 120 days delinquent.

According to analysis by the Urban Institute, loan modifications received through the NFMC Program resulted in significantly lower mortgage payments than would have been received without the help of the program. Lower monthly payments reduce the likelihood of a subsequent foreclosure.

As the foreclosure crisis continues to compound, this funding is essential to the continued ability of housing counseling agencies to help clients avoid foreclosure.

OnTrack's Foreclosure Prevention Program is available at not cost to clients in Western North Carolina. For more information about OnTrack's Program click here or call 828-255-5166.

 

 Holmes' Family Avoids Foreclosure
United Way NFCC Council on Accreditation