58% of Foreclosure Counseled Homeowners Report Reduction in Income

By: Timothy McFarlin | Published: June 8th, 2010 | Category: Foreclosure Issues

NeighborWorks America, the National Foreclosure Mitigation Counseling (NFMC) Program’s administrator, recently reported 58% of homeowners who received foreclosure counseling, through NFMC, said the primary reason they were facing foreclosure was due to reduced or lost income. The report comes from NeighborWorks` fifth Congressional report, which shows all program activity from January 1st, 2008 through January 31st, 2010.

During the NFMC Program’s lifespan, the percentage of homeowners citing reduced or lost income as their primary reason for facing foreclosure consistently grew. The increases mirror the country’s unemployment rate which, up until November 2009, also steadily increased.

CEO of NeighborWorks America, Ken Wade said, “With unemployment numbers not likely to dip below nine percent in 2010, our report proves what many already believed to be true: Unemployment and reduced income are having a devastating effect on our nation`s homeowners.” Wade added, “while Congress and state governments have stepped up and extended unemployment benefits to help families survive this tough economic climate, it`s time for mortgage servicers and investors to make meaningful accommodations for homeowners facing foreclosure. If they don’t, we`ll see even more empty houses and devastated neighborhoods in our communities.”

Interestingly enough, the report also shows 62% of NFMC clients had a fixed-rate mortgage; 49% held a fixed rate mortgage with interest rates less than 8%. Last year, NeighborWorks reported NFMC clients in foreclosure were 60% more likely to avoid foreclosure than those who were not receiving program counseling. As of May 24th, over 967,000 homeowners received foreclosure counseling.

Last year, on March 11th, President Obama signed the Omnibus Appropriations Act of 2009 which gave $50 million to NeighborWorks America in effort to continue the National Foreclosure Mitigation Counseling Program. And on December 16th of last year, the Consolidated Appropriations Act of 2010 appropriated an additional $65 million to the program, with $59.4 million for counseling alone.

Homeowners interested in foreclosure counseling from a NFMC Program organization in their community can visit: www.findaforeclosurecounselor.org.

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