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Stop Foreclosed Homes with Help from NeighborWorks America

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By : John Cutts    99 or more times read
NeighborWorks has helped stop foreclosed homes for thousands of troubled American homeowners since the start of the foreclosure crisis through its National Foreclosure Mitigation Counseling program.

According to Ken Wade, chief executive of NeighborWorks, the NFMC has counseled a total of 633,294 distressed homeowners through its network of 230 community organizations in over 4,400 communities across the states since the start of the crisis to the middle of November 2009.

The program has also provided 5,237 scholarships to foreclosure counselors.

NeighborWorks America is a congressionally chartered nonprofit which was created by the U.S. Housing and Urban Development Department and the Federal Home Loan Bank in the 1970s to revitalize older urban neighborhoods. It is also called Neighborhood Reinvestment Corporation, a national private-public neighborhood redevelopment organization.

Since 1991, NeighborWorks has aided 1.2 million low-income families through redevelopment programs.

Based on a study carried out by the Urban Institute, a significant number of distressed homeowners who sought help from NeighborWorks in 2008, the first full year of the NFMC, were able to stop foreclosed homes or to reverse current foreclosure proceedings. They were also able to have their mortgage loans modified to lower monthly payments.

The report, however, stated that NFMC was not a cure-all, particularly for homeowners already in foreclosure. Borrowers who were delinquent by only one or two payments were the ones getting the most benefit from the counseling program.

The researchers reported that 75 percent of homeowners seeking help were already in default on their home loans at the time they approached NeighborWorks, and 22 percent were already in foreclosure.

NFMC director Jeanne Fekade-Sellassie said that homeowners can get a better response from lenders if they receive good counseling. Counselors work as their advocates, explaining options for avoiding foreclosure.

Marietta Rodriguez, head of foreclosure prevention programs for NeighborWorks, said that without help from experienced counselors and national organizations, many borrowers are put on hold for hours when they call, made to wait for months for developments on their requests and oftentimes made to resubmit documents because of incomplete information or because bank representatives misplaced the papers.

Homeowners who receive free counseling from the NFMC were 62 percent more likely to save their homes from foreclosure than borrowers who do not seek foreclosure prevention help from reputable organizations.

All in all, the NFMC program of the NeighborWorks helped save $33 million in potential cost savings during the entire year of 2008 by helping homeowners stop foreclosed homes.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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