MSHDA’s Free Foreclosure Prevention Counseling Helps Michigan Homeowners Stay in Homes

Report Finds Counseling to Have Positive Impact

LANSING, MI – December 27, 2010 – (RealEstateRama) — A recently released report shows homeownership counseling networks in Michigan and nationwide are bringing significant relief to over a million families struggling to avoid foreclosure, Michigan State Housing Development Authority (MSHDA) Executive Director Gary Heidel announced today. MSHDA is part of a national effort through the National Foreclosure Mitigation Counseling (NFMC) program bringing major counseling assistance to over a million families. A report prepared by the Urban Institute on the impact of the NFMC program cited the remarkable success NFMC counseling has brought to participating families when compared to similar homeowners who did not receive counseling. The NFMC Program was created by Congress to address the nationwide foreclosure crisis by dramatically increasing the availability of free counseling for families at risk of foreclosure. Congress named NeighborWorks America as administrator of the program in 2008.

As of December 15, 2010, the program has provided 1.12 million struggling homeowners with foreclosure prevention counseling across the nation. MSHDA, through its nonprofit housing counseling network, is a provider of NFMC counseling to families in Michigan; having counseled over 17,000 homeowners since the program’s inception.

“With foreclosure filings reaching record numbers in this housing-led recession, it is refreshing to know that free counseling assistance is available to help families stay in their homes,” said Heidel. “Stable homeowners make stable neighborhoods and that leads to a stronger Michigan and thriving, vibrant communities.”

Key findings of the Urban Institute’s report:

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More Foreclosure Cures. NFMC-counseled homeowners had almost 70 percent – or 1.7 times – higher relative odds of curing their foreclosure than if they had not received NFMC counseling.
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Lower Mortgage Payments. Urban Institute estimates that on average, NFMC clients who received loan modifications reduced their loan payments by $267 more each month – or more than $3,200 per year – than they would have without NFMC counseling.
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Lasting Solutions. Counseling helped homeowners who obtained a loan modification remain current on their loan modification payments. For clients in serious delinquency or foreclosure who were counseled in 2008 and received a loan modification after counseling, there was a 45 percent increase in the relative odds they would remain current on their payments through the end of 2009.
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More Cures through Loan Modifications. Homeowners who got NFMC counseling before obtaining a loan modification were more likely to cure their loan defaults. For clients in serious delinquency or foreclosure who were counseled in 2008 and who received a loan modification after counseling, there was a 53 percent increase in the relative odds that they would bring their loans current.

For more information about foreclosure prevention, or to find a housing counseling agency in your area, please call MSHDA’s foreclosure prevention call center at 1-866-946-7432.

The Michigan State Housing Development Authority provides financial and technical assistance through public and private partnerships to create and preserve decent, affordable housing for low- and moderate-income residents and to engage in community economic development activities to revitalize urban and rural communities.
MSHDA’s loans and operating expenses are financed through the sale of tax-exempt and taxable bonds as well as notes to private investors, not from state tax revenues. Proceeds are loaned at below-market interest rates to developers of rental housing, and help fund mortgages and home improvement loans. MSHDA also administers several federal housing programs.

Contact:
Mary Lou Keenon
Communications Director
Telephone: 517 373-0011 – Media
Telephone: 866 946-7432 – Homeowners