Job Loss Top Foreclosure Reason

Job Loss Top Foreclosure Reason WASHINGTON, DC - NeighborWorks America, the administrator of the National Foreclosure Mitigation Counseling (NFMC) Program, announced that more than half (54%) of homeowners who received foreclosure counseling through the NFMC Program reported the primary reason they were facing foreclosure was reduced or loss of income. This finding was reported in NeighborWorks' fourth Congressional report, which reported on NFMC Program activity through August 18, 2009.

Over the course of the NFMC program, which began January 1, 2008, the percentage of homeowners who cited reduced or loss of income as the top reason they were facing foreclosure has steadily increased. In the June 2009 Congressional report, 49 percent of NFMC counseled-homeowners reported reduction or loss of income as the primary reason; 45% cited this reason in the February 2009 report; as did 41% in the October 2008 report. This parallels the nation's unemployment rate, which until the November 2009 employment report, had steadily increased since October 2008.

"For the last year this nation has witnessed the highest unemployment rate and the largest number of job losses in over a generation," said Ken Wade, CEO of NeighborWorks America. "Our report proves what many already believed to be true – no longer are mortgage payment increases, or even health issues or divorce, cited as the top reason homeowners are facing foreclosure. With the unemployment rate steadily increasing over the last year, it's no surprise that reduced or loss of income is now the primary reason countless homeowners are facing foreclosure."

The report also found that 56% of all NFMC clients held a fixed-rate mortgage. Forty-three percent (43%) of clients held a fixed rate mortgage with an interest rate below 8%.

To date more than 750,000 families have received foreclosure counseling as a result of NFMC Program funding. Late last month NeighborWorks reported that NFMC Program clients in foreclosure were 60 percent more likely to get out of foreclosure than homeowners who did not receive foreclosure counseling.

The NFMC Program was created by Congress to address the nationwide foreclosure crisis by dramatically increasing the availability of housing counseling for families at risk of foreclosure. The $180 million program was authorized through the FY 2008 Consolidated Appropriations Bill, which named NeighborWorks as its administrator. An additional $180 million was appropriated to this effort on July 30, 2008 through the Housing and Economic Recovery Act of 2008, and the Omnibus Appropriations Act of 2009 appropriated another $50 million to the program on March 11, 2009. For more information about the National Foreclosure Mitigation Counseling Program, visit www.nw.org/nfmc.

Homeowners who would like to receive foreclosure counseling from a NFMC Program -funded counseling agency in their community can visit www.findaforeclosurecounselor.org.

NeighborWorks America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. Since 1991, we have assisted nearly 1.2 million low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network ― more than 230 community development organizations working in more than 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks organizations have generated more than $15 billion in reinvestment in these communities. NeighborWorks America is the nation's leading trainer of community development and affordable housing professionals.
Source: NeighborWorks

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