National Foreclosure Mitigation Counseling Program Evaluation: Final Report Rounds 1 and 2

Abstract

The National Foreclosure Mitigation Counseling Program is a major federal initiative to provide free counseling services to homeowners in danger of losing homes, helping them to work with their mortgage lenders and services to avoid foreclosure and serving more than a million households to date. This paper reports statistical analyses of the impacts of that counseling. It finds that counseled borrowers, compared to those without counseling, receive significantly larger reductions in mortgage payments through loan modifications and more frequent loan modifications and other mortgage workouts curing delinquencies, are more likely to sustain default cures once obtained, and resulting have signficantly fewer foreclosures, controlling for many other factors regarding homeowners, their mortgages, and market conditions.

Keywords: housing finance, housing counseling, mortgage foreclosure