Borrowers who underwent foreclosure counseling are more likely — nearly twice as likely — to receive a loan modification and stay current on their mortgage, according to a new study by the Urban Institute, which analyzed about 800,000 borrowers who participated in the National Foreclosure Mitigation Counseling program from January 2008 to December 2009.
Through the program, foreclosure counselors assist home owners on budgets and guide them in how they can avoid foreclosure.
Home owners who participated in the program were at least 67 percent more likely to stay current on their mortgage within nine months after receiving a loan modification, according to the study. Also, home owners who participated in the program had their mortgage payments, on average, reduced by $176 per month, the study found.
However, the counseling program has been on the chopping block in recent months, HousingWire reports. Earlier this year, Congress cut the funding for HUD’s housing counseling programs, but in November voted to restore $40 million to counselors.
Source: “Foreclosure Counseling Doubles the Chance of Mortgage Modification,” HousingWire (Dec. 19, 2011)
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