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National Foreclosure Mitigation Counseling Program Update www.nw.org/nfmc December 2008 www.nw.org/nfmc Grantee Production Congressional Report Training.

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Presentation on theme: "National Foreclosure Mitigation Counseling Program Update www.nw.org/nfmc December 2008 www.nw.org/nfmc Grantee Production Congressional Report Training."— Presentation transcript:

1 National Foreclosure Mitigation Counseling Program Update December Grantee Production Congressional Report Training Efforts Counseling Efforts Questions

2 Program Update As of December 10, 2008: Training  over 3,000 training scholarships provided  over 4,400 certificates awarded in foreclosure-related courses  over 1,500 e-learning certificates earned in Foreclosure Basics Counseling  217,000 homeowners have received 233,000 units of counseling throughout the nation.

3 Program Update Primary Reason for Default (as of Sept 15, 2008) Primary Reason for DefaultPercent Reduction in Income26% Loss of Income15% Increase in Loan Payment9% Medical Issues8% Poor Budget Management Skills8% Increase in Expense4% Divorce/Separation4% Death of Family Member2% Business Venture Failed2% Other24%

4 Program Update Loan Type of NFMC Clients (as of Sept 15, 2008) Only 22% of mortgages nationwide are ARMs, while 72% are fixed- rate mortgages

5 Program Update Loan Type of NFMC Clients Compared to Loan Type of All Homeowners (as of Sept 15, 2008) Sources: Mortgage Bankers’ Association National Delinquency Survey, June 2008, and NFMC Program Reported Data

6 Program Update Loan Status at Intake (as of Sept 15, 2008) Loan StatusPercent Current28% Days Late22% Days Late19% Days Late9% 121+ Days Late22% Grantee Production Congressional Report Training Efforts Counseling Efforts Questions

7 Program Update Outcomes (as of Sept 15, 2008) OutcomeUnitsPercent Currently receiving foreclosure prevention/budget counseling 21,930 22% Initiated forbearance agreement/repayment plan8,7978% Counseled and referred to another social service or emergency assistance agency 8,602 8% Mortgage modified4,9865% Pre-foreclosure sale3,6453% Brought mortgage current3,0013% Bankruptcy1,7192% (continued)

8 Program Update Outcomes (as of September 15) OutcomeUnitsPercent Withdrew from counseling1,5301% Counseled and referred for legal assistance1,4161% Mortgage foreclosed1,2421% Entered debt management plan8981% Sold property/chose alternative housing solution6531% Mortgage refinanced4930% Executed a deed-in-lieu1360% Obtained partial claim loan from FHA lender860% Received second mortgage530% Other10,59310% Ended counseling after Level One – outcome unknown35,29134%

9 Program Update Counseling Challenges (from 1 st Quarterly Report) Communication with Servicers  Servicer responses routinely took from 45 to more than 60 days  Loss mitigation departments understaffed and overworked  Documentation faxed or mailed to servicers was lost repeatedly and counselors had to send documentation multiple times  Counselors were connected to a different representative each time they called who proposed different solutions and requirements Mortgage Restructurings  Loan modifications, forbearance and principal write-downs offered less than repayment plans  Servicers generally had a limited understanding of PSA requirements which lengthened the time to obtain a decision about borrowers’ options  Refinance plans offered were not affordable to borrowers  Lack of PSA incentives for servicers to refinance mortgages

10 Program Update Counseling Challenges (from 1 st Quarterly Report) Borrower Resources  Lack of borrower follow-through with counselors  Job losses  Rising gas and food prices  Falling housing values leaving borrowers “upside down”  Borrowers obtaining loans that were not affordable in the first place  General lack of knowledge about mortgage products and loan terms. NFMC Program Reporting  Too much information required on each borrower  Time requirements too great  Difficulty in initial set-up of computerized reporting systems

11 Program Update Successful Counseling Strategies (from 1 st Quarterly Report) Outreach  Reaching borrowers early - before they were 60 days delinquent - increased the likelihood of a successful outcome  Reach out to at-risk homeowners via employers, faith communities, foreclosure fairs, flyers and postcards, door-to-door visits and cable access tv & other press coverage Client Preparation  Require clients to bring all documentation to their first meeting  Set realistic expectations with clients  Conduct group orientations or workshops before one-on-one meetings  Use the Internet to share preliminary information to allow for triage

12 Program Update Successful Counseling Strategies (from 1 st Quarterly Report) Counseling Processes and Services  Have counselors available evenings and weekends or at all times  Requiring clients to create a crisis and/or long-term budget  Contact the servicer with the client present;  Escalate difficult cases to more experienced counselors or legal assistance  Provide rescue funds that will catch client up on their mortgage (Not with NFMC funds) Communication with Servicers  Use HOPE NOW list of loss mitigation department phone numbers  Analyze refinancing plans provided by servicers to ensure borrower feasibility  Follow up with servicer within 24 to 48 hours to ensure they had received electronically-transmitted documents


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