May 28, 2010
Erin Angell Collins, 202-220-6317, email@example.com
Doug Robinson, 202-220-2360, firstname.lastname@example.org
More than Half of Families Facing Foreclosure Affected by Job Loss,
According to New NeighborWorks America Report
Loss or Reduction in Income Reported by 58% of Homeowners Who Received Foreclosure Counseling through NFMC Program
Washington, D.C. — Today NeighborWorks America, the administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, announced that 58 percent of homeowners who received foreclosure counseling through the NFMC Program reported the primary reason they were facing foreclosure was reduced or lost income. The news is found in NeighborWorks’ fifth Congressional report, which outlines NFMC Program activity through January 31, 2010.
Over the course of the NFMC program, which began January 1, 2008, the percentage of homeowners who cited reduced or lost income as the primary reason they were facing foreclosure has steadily increased. In the November 2009 Congressional report, 54 percent of NFMC-counseled homeowners reported reduced or lost income as the main reason for default; as did 49 percent, 45 percent, and 41 percent in the June 2009, February 2009, and October 2008 reports, respectively. These steady increases parallel the nation’s unemployment rate, which until the November 2009 employment report, had marched upward since October 2008.
Reasons for Facing Foreclosure Reported by NFMC Clients
“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,” said Ken Wade, CEO of NeighborWorks America. “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.”
The report also found that 62 percent of all NFMC clients held a fixed-rate mortgage. Forty-nine percent (49%) of clients held a fixed rate mortgage with an interest rate below 8 percent.
As of May 24, 2010, more than 967,000 families have received foreclosure counseling as a result of NFMC Program funding. In October 2009, NeighborWorks reported that NFMC Program clients in foreclosure were 60 percent more likely to avoid foreclosure than homeowners who did not receive foreclosure counseling.
National Foreclosure Mitigation Counseling Program
In December 2007, NeighborWorks America was named in the FY2008 Consolidated Appropriations Act (P.L. 110-161) to administer the first round of $180 million in grant funding through the National Foreclosure Mitigation Counseling Program. On July 30, 2008, Congress passed the Housing and Economic Recovery Act of 2008 (P.L. 110-289), which appropriated an additional $180 million to this effort.
On March 11, 2009, President Obama signed the Omnibus Appropriations Act of 2009 (P.L. 111-8), which appropriated $50 million to NeighborWorks America to continue the National Foreclosure Mitigation Counseling Program. The third appropriation provided funds for foreclosure counseling, training for foreclosure counselors (up to $5 million), and administrative expenses (four percent) associated with running the NFMC program.
On December 16, 2009, the Consolidated Appropriations Act of 2010 (P.L. 111-117) appropriated an additional $65 million to the program, including $59.4 million for counseling. This fourth appropriation also provided training for foreclosure counselors (up to $3 million), and administrative expenses (four percent) associated with running the NFMC program.
Homeowners who would like to receive foreclosure counseling from a NFMC Program-funded counseling organization in their community can visit www.findaforeclosurecounselor.org.
For more information about the NFMC Program, visit www.nw.org/nfmc.
To download the full report, visit http://www.nw.org/network/nfmcp/documents/CongressionalReportandAppendices.pdf
NeighborWorksAmerica creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. Since 1991, we have assisted nearly 1.2 million low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network ― more than 235 community development organizations working in more than 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks organizations have generated more than $15 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.