CLEVELAND, OH - U.S. Sen. Sherrod Brown (D-OH) today joined Neighborhood Housing Services of Greater Cleveland to commemorate the one millionth customer served through the National Foreclosure Mitigation Counseling Program (NFMC) and to outline ongoing efforts to address the housing crisis. As of mid-August, one million American homeowners have received housing counseling aimed at keeping them in their homes through the National Foreclosure Mitigation Counseling Program (NFMC), which began in early 2008.
"Thousands of Ohio families have been hit hard by the downturn in the economy, and as a result, are close to defaulting or have already defaulted on their home loans. But homeowners in Cleveland and elsewhere in northeast Ohio are fortunate to have the Neighborhood Housing Services of Greater Cleveland on their side to help them avoid home foreclosure and better manage their mortgage," said Brown. "As we've heard today, home foreclosure counseling can be a cost-efficient, effective approach that helps homeowners keep their homes. And thanks in part to the federal funding that keeps the NHSGC and other NeighborhoodWorks organizations operational, more than a million American homeowners have had access to these critical home foreclosure prevention services."
Brown was also joined by Earnest Mays, a Cleveland homeowner successfully counseled by the NHSGC. Mays, a commercial truck driver, struggled to make mortgage payments when hit by hardship. Through no fault of his own, he was involved in a car accident that left him unable to work. Mays had a variable-rate mortgage that peaked at a 12 percent interest rate. With NHSGC's assistance, Mays' mortgage was modified to a fixed rate loan with 7.2 percent interest, reducing his monthly mortgage payments by approximately 15 percent.
According to NeighborWorks, which administers the NFMC program, one million clients have received housing counseling from early 2008 through mid-August of this year. Over 4,500 homeowners in the northeast Ohio region of Cuyahoga, Lorain, Erie, Huron and Medina counties have received foreclosure prevention services through Neighborhood Housing Services of Greater Cleveland. According to national study by the Urban Institute, homeowners who received counseling through the NFMC program were 60 percent less likely to lose their home to foreclosure than homeowners who did not seek counseling.
Counseling programs have a demonstrated track record in helping homeowners navigate the complicated process of contacting lenders, banks, mortgage servicers, and legal services to modify their mortgage loans and ultimately save their homes from foreclosure. Counseling has proven to be one of the most successful and cost-effective ways of avoiding foreclosure. Foreclosure prevention counseling often costs no more than $1,000 to $1,500 per household assisted, according to counseling groups. Conversely, the Joint Economic Committee of Congress has estimated that a typical foreclosure can cost up to $227,000.
As a member of the Senate Committee on Banking, Housing, and Urban Affairs, Brown is a champion of foreclosure mitigation efforts. When the Senate passed a housing bill in 2008, Brown successfully passed an amendment that provided an additional $80 million in mortgage counseling funds. He is also working to improve the federal loan modification program so that more Ohioans can lower their monthly mortgage payments and stay in their homes. In February, Brown wrote to U.S. Treasury Secretary Timothy Geithner to suggest improvements to the Home Affordable Modification Program (HAMP) so that more Ohio families avoid foreclosure. HAMP was designed to encourage banks to modify mortgages to prevent foreclosures. Ohio continues to rank forty-eighth among the fifty states and the District of Columbia in the number of homeowners who have been able to modify their mortgages for lower payments through HAMP. Only 14.8 percent of seriously delinquent loans have been modified through HAMP in Ohio, and only 8 percent of trial modifications have been converted into permanent modifications. Brown also urged more federal funding for foreclosure prevention counseling programs.
Brown is also a leading proponent of providing assistance to communities affected by the housing crisis and population loss. He fought for the creation of the Neighborhood Stabilization Program (NSP) in the Housing and Economic Recovery Act of 2008 and the continuation of the program in the American Recovery and Reinvestment Act (ARRA) of 2009. In Sep. 2008, Brown announced that Ohio communities would receive more than $258 million in NSP funds authorized by the housing bill. In Sep. 2009, Brown wrote to Secretary Donovan in support of Ohio applicants to the second wave of funding through the NSP program.
Founded in 1975, Neighborhood Housing Services of Greater Cleveland (NHSGC) provides families in Northeast Ohio with ongoing programs and services for achieving, preserving, and sustaining the American dream of home ownership.