Real Estate Market

Homeownership counseling again proves invaluable

(12/29/11) Erate Exclusive - So many studies come to the same conclusion about counseling, you just shouldn't leave a homeowner without it.

The latest report from NeighborWorks America prepared by the Urban Institute (UL) examined the consumer benefits of the federally-approved National Foreclosure Mitigation Counseling (NFMC) Program.

It says homeowners who received NFMC counseling were nearly twice as likely to obtain a mortgage modification and at least 67 percent more likely to remain current on their mortgage nine months after receiving the modification, saving homeowners their homeownership and loan servicers considerable time and expense.

A mortgage modification occurs when the lender reworks the terms of an existing home loan, typically to lower payments and make the home more affordable, according to Silver Spring, MD-based mortgage expert Peter Miller's "The Quick & Dirty Guide To Successful Mortgage Modifications" (Silver Spring Press, $2.99).

To get the payment down, mortgage modification lenders lower the interest rate, extend the loan term, reduce the principal or use any combination of those approaches.

Modification programs generally come with a homeowner counseling prerequisite. "All homeowners should be required to undergo financial counseling as part of the mortgage process. Having an independent and unbiased counselor review and essentially pre-underwrite the loan with the consumer participating could only result in a better lending decision for both the consumer and their lender," said Nancy Osborne, COO of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

The institute compared NFMC loans with non-NFMC loans and found that NFMC counseled homeowners were 89 percent more likely to get a modification than those without the counseling.

The much maligned federal government's Homeownership Affordable Modification Program (HAMP), which mandates the kind of counseling offered by NFMC, helped boost the positive effect.

Before HAMP, 8 percent of homeowners receiving counseling assistance had modification cures, compared to 5 percent who did not receive counseling. Post-HAMP, 17 percent of homeowners receiving counseling assistance had modification cures, compared to 9 percent without.

Counseled homeowners also saved more money, receiving loan modifications resulting in a monthly payment that was $176 less, on average, than non-counseled borrowers - a savings of more than $2,000 a year.

"The NFMC program works incredibly well for homeowners and communities," said Eileen Fitzgerald, NeighborWorks America CEO.

Foreclosure prevention counseling, rather than the smaller modified loan payment, gets credit for the sustained reduced default rate, the study found.

"the great bulk of the sustainability benefit resulted from other impacts of counseling, such as helping borrowers to improve their financial management skills, assisting them in managing relationships with servicers/investors, and providing other types of support," according to the study.

"In short, the personalized work nonprofit housing counselors do to help homeowners improve their overall financial situation had the greatest effect on a homeowner not falling behind again on their mortgages in the future," said Fitzgerald.

What's perhaps most significant about studies extolling the virtues of counseling is that every homeowner should get counseled and learn the ins and outs of homeownership before they take the plunge or find themselves facing foreclosure.

Refinance at Today's Low Rates!

 

Follow the link to continue reading the related articles

Homeowners renting out underwater homes to move on

Feds continue 'tough guy' stance against mortgage modification scams

Foreclosure reviews available for 4.5 million consumers

Housing counseling generates optimism during tough times

Chase offers mortgage counseling to troubled consumers

 

 

 

 

 

 

Fannie Mae & Jumbo Mortgage Rates

Just One Click! = Current Rate Chart

Pennsylvania Mortgage Rates Current Mortgage Rates - Hawaii Current Mortgage Rates - Alaska West Virginia Mortgage Rates Virginia Mortgage Rates District of Columbia Mortgage Rates Maryland Mortgage Rates Delaware Mortgage Rates New Jersey Mortgage Rates Connecticut Mortgage Rates Rhode Island Mortgage Rates Massachusetts Mortgage Rates New Hampshire Mortgage Rates Vermont Mortgage Rates New Hampshire Mortgage Rates Maine Current Mortgage Rates Vermont Mortgage Rates Current Mortgage Rates - New York Current Mortgage Rates - Michigan Current Interest Rates - Wisconsin Current Mortgage Rates - MINNESOTA Ohio Mortgage Rates Current Mortgage Rates - Kentucky Current Mortgage Rates - Indiana Illinois - Current Mortgage Rates Current Mortgage Rates - Iowa Missouri Mortgage Rates Current Mortgage Rates - North Carolina South Carolina Mortgage Rates Current Mortgage Rates - Florida Current Mortgage Rates - Georgia Current Mortgage Rates - Tennessee Current Mortgage Rates - Alabama Current Mortgage Rates - Mississippi Current Mortgage Rates - Louisiana Current Mortgage Rates - Arkansas Current Mortgage Rates - Oklahoma Current Mortgage Rates - TEXAS Current Mortgage Rates - New Mexico Current Mortgage Rates - Arizona Current Mortgage Rates - Kansas Current Mortgage Rates - Nebraska Current Mortgage Rates - Colorado Current Mortgage Rates - Wyoming South Dakota Mortgage Rates Current Mortgage Rates - North Dakota Current Rates - Montana Idaho Current Rates Washington Mortgage Rates Current Mortgage Rates - Oregon Current Mortgage Rates - Utah Current Mortgage Rates - Nevada Current Mortgage Rates - California

Start by selecting your state





Get the Updated and Improved Mortgage Rates App from ERATE.com

iPad for Mortgage Rates

Real Estate Market News

Refinancing: Selecting a Loan

Moving Ahead With Your Refinance