Local nonprofits, national intermediaries and state housing financing agencies that participate in the National Foreclosure Mitigation Counseling program have helped 1.5 million homeowners avoid losing their properties, according to NeighborWorks America.
Additionally, the program has helped save local governments, lenders and homeowners approximately $920 million.
NeighborWorks America said NFMC clients who received a mortgage modification lowered their monthly mortgage payment, on average, $176 more per month than non-NFMC clients. For the year, this represents $372 million in savings to NFMC-counseled homeowners.
With more fixed-rate mortgages and lower interest rates, mortgage terms are becoming more favorable for homeowners. The percentage of clients that reported having fixed-rate mortgages with interest rates at or below 8% increased from 30% in October 2008 to 57% in August 2012. Furthermore, nearly 69% of NFMC program clients had a fixed-rate mortgage.
“A homeowner who receives help from the NFMC program saves significant money and time and, importantly, is able to remain in their home,” said Eileen Fitzgerald, CEO of NeigborWorks America. “The NFMC program has provided counseling in every state, the District of Columbia and Puerto Rico. We’re proud to spotlight the excellence and perseverance of homeownership counselors in helping people to stay in their homes.”
Darren Ernst, a divorced dad from Cleveland, who shares custody of his two teenage children, was one client who benefited from utilizing the NFMC program.
Ernst lost his job as a truck driver and was hired by another company one month later, but for less money than his previous employer. In order to keep up with the mortgage payment, he decided to stop paying some of his other bills.
Despite the cutbacks being made, Ernst was still struggling to meet the monthly demands and was thinking about walking away from his home until he was referred to NHS of Greater Cleveland. Working with his counselor, Darren Hamm, the two worked together to find a solution to Ernst’s problems. Hamm was able to get the lender to reduce Ernst’s principal balance by almost $60,000, therefore allowing Ernst to not lose his property to foreclosure.
“He walked me through everything,” Ernst said about Hamm. “If I had questions, I could call any time and ask. He was there for me and got everything straightened out.”