September 29, 2015
Congress has awarded NeighborWorks over $750 million for housing counseling since 2007. NeighborWorks has submitted its most recent quarterly report to Congress on Foreclosure Counseling Successes & Challenges for its National Foreclosure Mitigation Counseling Program. NeighborWorks prepares different reports on outcomes for homeowners while the quarterly reports like this one focus on “successes and challenges of foreclosure mitigation counseling,” as the title of the report suggests. (1) Notwithstanding this limited focus, the report is structured in such a way that it makes me somewhat skeptical of the successes of foreclosure counseling.
The report summarizes the Program’s counseling successes as follows:
Foreclosure rates are waning nationwide; however, the crisis continues to plague many areas of the country in a significant way. Over the course of the NFMC Program, counselors have faced many successes and challenges as they provided foreclosure counseling. Despite many of the challenges counselors faced with foreclosure counseling earlier in the NFMC Program, they have risen to the task by streamlining operations, developing better relationships with servicers, cross-training staff, and expanding counseling services to meet the need of homeowners in crisis. NFMC counselors across the country continue to provide foreclosure mitigation assistance to homeowners with the funds appropriated by Congress. (2)
If you break this down, the successes are:
- counselors have streamlined their own operations
- counselors have developed better relationships with mortgage servicers
- counselors have cross-trained staff
- counselors have expanded their services
Not one of those successes actually talks about achieving efficiencies in the provision of services or improved rates of success for homeowners based on these changes. For instance, I would think that Congress would want to know whether streamlined operations resulted in more homeowners served and more positive outcomes for homeowners achieved. Discussing metrics that are solely internal to the program without any discussion of how those metrics impact the population to be served seems like a step in the wrong direction to me.
That being said, the report highlights the fundamental problems that homeowners in foreclosure face: “counselors for the NFMC Program continue to report that a big challenge is communicating with servicers. Lack of adequate homeowner resources also remains a persistent problem and is a growing challenge for counselors.” (2)
Recalcitrant banks and impoverished homeowners. It sounds like counselors are stuck between a rock a hard place, much like the homeowners themselves.