January 24, 2011
Gordon Anderson (512) 475-4743
State continues to aggressively curb home foreclosures through increased counseling
(AUSTIN) — While the rate of Texas homes being foreclosed upon remains well below the rest of the nation, there still are thousands of families in the state who face this bleak possibility. Accordingly, state efforts continue aggressively to maximize grant funding secured over the past two years through the federal National Foreclosure Mitigation Counseling (NFMC) Program, an effort that has helped provide vital foreclosure prevention counseling to over 2,500 Texas homeowners.
The Texas Department of Housing and Community Affairs (TDHCA) and Texas State Affordable Housing Corporation (TSAHC), a nonprofit organization charted by the Legislature for the promotion of affordable housing, together have taken the lead on the state’s foreclosure prevention activities. The two agencies have administered approximately $999,743 in previous NFMC grants which were awarded to support a network of nonprofit counseling agencies at the local level.
“While Texas has not experienced foreclosures rates as high as those of several other states, the rates continue much higher than anyone would prefer and we must do everything we can to reduce those numbers,” said Michael Gerber, TDHCA Executive Director. “Not only do foreclosures impact families, they undermine the very framework of our communities. Texans should know that their state housing agency is working with its partners to prevent this unfortunate situation from happening to them or their neighbors.”
The NFMC Program is a critical lifeline for homeowners who might otherwise have no hope of avoiding foreclosure and keeping their home. According to a recent report issued by the Urban Institute, foreclosure prevention counseling financed through the program has proven to be a highly effective tool in helping over 1.2 million Americans struggling to maintain homeownership.
Among the key findings of the Urban Institute report was the fact that homeowners who received NFMC counseling had approximately 70 percent higher relative odds of resolving their foreclosure than if they had not received the counseling. Additionally, the report estimates that NFMC clients who received a loan modification reduced their loan payments by an average of $267 more each month – more than $3,200 annually – than they would have without the counseling.
Equally important, these homeowners are receiving long-term solutions to their financial problems, increasing the chances that they will remain current on their loan payments, avoid foreclosure, and keep their homes.
“The new data from the Urban Institute confirms what we have seen ourselves – foreclosure prevention counseling is effective,” said David Long, TSAHC President. “We will continue to work towards securing grants, like the NFMC program, to provide Texas families who are struggling to keep their home with free counseling from nonprofits that specialize in guiding a family through this difficult process.”
Determined to assist even greater numbers of Texas homeowners, TDHCA has announced that it is seeking to leverage $25,000 in state matching funds to secure a $1.6 million NFMC Program grant that that could potentially help as many as 6,260 Texans avoid foreclosure and keep their homes. In addition, TSAHC will contribute $25,000 in matching funds towards the potential $1.6 million grant.
Financial support through NFMC grants helps local agencies develop an analysis of the client’s financial situation, determine the present value of the client’s home, and review the options available to the client such as a financial restructuring of their mortgage loan. Eligible recipients must own and reside in one-unit, single-family properties with mortgages in default or in danger of default.
Originally authorized by the Housing and Economic Recovery Act of 2008 and administered by NeighborWorks America, a national nonprofit organization created by Congress to provide financial support, technical assistance, and training for community-based revitalization efforts, the NFMC Program continues to play a critical role in helping Americans avoid foreclosure and keep their homes.
A decision on the grant is expected in May. If the state is successful, this would be the fourth NFMC Program grant to Texas from NeighborWorks.
About the Texas Department of Housing and Community Affairs
The Texas Department of Housing and Community Affairs is committed to expanding fair housing choice and opportunities for Texans through the administration and funding of affordable housing and homeownership opportunities, weatherization, and community-based services with the help of for-profits, nonprofits, and local governments. For more information about fair housing, funding opportunities, or services in your area, please visit www.tdhca.state.tx.us or the Learn about Fair Housing in Texas page.
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