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UNEMPLOYMENT, HIGH RATES STILL OBSTACLES FOR MANY FACING FORECLOSURE The National Foreclosure Mitigation Counseling (NFMC) program has provided counseling to almost 1.6 million homeowners across the country since the program started in 2008. According to an NFMC report released to Congress, common attributes of struggling homeowners include unemployment or underemployment as well as high mortgage rates. About 62 percent of homeowners reaching out for foreclosure prevention counseling cite income loss or a reduction in income as the primary reason they are delinquent on their home loans, according to NFMC. NFMC also points out that 37 percent of homeowners receiving counseling spend more than half their income on monthly mortgage payments; about 19 percent spend more than 75 percent of their income on mortgage payments. "Although the economy is improving, there are still many homeowners who need foreclosure prevention counseling and the NFMC continues to assist thousands of families," said Eileen Fitzgerald, CEO of NeighborWorks 18 America, which administers the federal NFMC program. Almost 20 percent of homeowners receiving NFMC counseling have mortgage loans with interest rates of 8 percent of higher. However, NFMC points out in its report that this proportion is down from 40 percent with home loan rates above 8 percent in October 2008. Homeowners who receive counseling through NFMC are more likely to obtain loan modifications, and when they do they are more likely to receive higher monthly savings on their mortgage payments and less likely to redefault, according to NFMC. When a homeowner seeks counseling, he or she is 97 percent more likely to obtain a loan modification and avoid foreclosure, according to data from the first two years of the NFMC program. The average counseling recipient's monthly payment reduction is about $176 greater than the savings obtained by a homeowner who did not receive counseling, accruing savings of $2,100 per year for counseled homeowners, according to a review conducted by the Urban Institute. "A homeowner who receives help from the NFMC program saves significant money and time and, importantly, often is able to remain in their home," Fitzgerald said. The Urban Institute also estimates that by helping homeowners and preventing foreclosures, NFMC has saved homeowners, lenders, and local governments about $920 million. "Although the economy is improving, there are still many homeowners who need foreclosure prevention counseling and the NFMC continues to assist thousands of families." –Eileen Fitzgerald, NeighborWorks America

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