Urban Institute Study Demonstrates the Value of Homeownership Counseling

NeighborWorks America has released a study by the Washington, DC-based Urban Institute. The study is based on the analysis of nearly 240,000 homeowners who received counseling through the National Foreclosure Mitigation Counseling program. More than 1.8 million homeowners have been helped by the NFMC program, administered by NeighborWorks America since 2008.

  • Homeowners who work with housing counselors are, on average, almost three times more likely to obtain a money-saving mortgage modification.
  • The probability of completing a short sale once started was 21% greater when working with a housing counselor.
  • By working with a housing counselor a homeowner is nearly twice as likely to get caught up on missed mortgage payments and about 60 percent less likely to fall behind again.
  • Nearly two-thirds of the 151,000 loan modifications that NFMC clients received would not have happened at all without the assistance of their counselor.

Urban Institute Report Infographic

Over $4 million dollars awarded to NeighborWorks Texas Alliance members

The Texas Department of Housing and Community Affairs (“TDHCA”) awarded $4,462,613 of the $60.1 million in housing tax credits awarded across Texas for the construction or rehab of affordable rental housing.

The three Texas NeighborWorks Organizations received $4,462,613 in Low Income Tax Credits for five projects comprised of 421 units.

  • Foundation Communities in Austin, Texas received tax credits for three properties. A total annual award of $2,990,000 for 293 units.
  • Avenue CDC in Houston received tax credits for one property. A total annual award of $566,000 for 48 units
  • Brownsville CDC received tax credits for one property. A total annual award of $897,613 for 80 units

The awards, made through the state housing agency’s 2014 Housing Tax Credit Program allocation cycle, is expected to help finance 5,407 affordable rental units, increasing housing options for individuals and families earning no more than 60 percent of the area median family income.

“The Housing Tax Credit Program is increasingly important to the state’s growing numbers of young working families, as it expands the housing choices for these households while offering them a path to improved living standards,” according to Tim Irvine, TDHCA Executive Director.

Besides bringing greater stability to low-income individuals and families, the construction payroll salaries, local purchases, and taxes and fees the program generates ensures that the entire state will benefit from the awards.

The federal Housing Tax Credit Program is the state’s primary means of directing private capital toward the development of affordable rental housing. Developers and their investment partners use the credits to offset their federal tax liability on a dollar-for-dollar basis in exchange for the construction or rehabilitation of rental units offering a reduced rent.

New Research from Nonprofit NeighborWorks America Finds Nearly One-Third Drop in Likelihood of Serious Mortgage Delinquency When Consumers Receive NeighborWorks Pre-Purchase Housing Counseling and Education

Mortgage Industry, and Local Governments Could Save Tens of Millions of Dollars if NeighborWorks Pre-Purchase Housing Counseling Education Were More Widely Available

Washington, D.C. – NeighborWorks America today released new peer-reviewed research that finds homebuyers who receive NeighborWorks pre-purchase housing counseling and education are nearly one-third less likely to fall behind 90 days or more on their mortgages within two years of origination, than consumers who don’t receive NeighborWorks pre-purchase counseling and education. The research findings have important implications for the mortgage industry because a significant number of seriously delinquent mortgage loans end up in foreclosure, costing the mortgage industry as a whole millions of dollars.

The research was conducted by Neil Mayer and Associates and Experian, and is based on approximately 75,000 mortgage loans originated in 2007, 2008 and 2009, when residential mortgage underwriting standards began to tighten. The study used econometric methods to measure whether and to what extent pre purchase services provided by the NeighborWorks network affect first mortgage loan performance. The research demonstrates a significant return to investment in NeighborWorks network pre-purchase counseling and education, in terms of avoiding the costs related to delinquency and foreclosure, and its associated impacts on families, their communities, and servicers.

“NeighborWorks America has long known that pre-purchase housing counseling and education, provided by certified professionals in our network helps create homeowners who are less likely to become seriously delinquent on their mortgages,” said NeighborWorks America CEO Eileen Fitzgerald. “Using data from the NeighborWorks network and its customers who received this important advice and guidance, and comparing it to homebuyers who didn’t receive similar housing counseling and education, we now know the empirical value that NeighborWorks housing counseling and education provide.”

“Policy makers and lenders should take note. This study provides compelling evidence that pre-purchase counseling has a significant impact on reducing serious loan delinquencies within the first two years after a mortgage loan is originated,” said Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard University.

Belsky added, “What makes the study so important is that it goes a long way towards correcting for any possible bias introduced because people who self-select to receive counseling may also have a greater propensity to repay their loans.

While the NeighborWorks America research announced today addresses mortgage loans that are 90 days or more delinquent, on average 14% of mortgage loans that are that seriously delinquent end up in foreclosure, according to data from National Association of Realtors. Estimates vary, but total losses due to foreclosure borne by local governments, servicers and households can exceed $50,000 per foreclosure, according to a report from the Joint Economic Committee of the U.S. Congress.

Moreover, recently the Bipartisan Policy Center’s Housing Commission underscored the important value of quality housing counseling. According to the report, Housing America’s Future, ‘…housing counseling can improve prospective borrowers’ access to affordable, prudent mortgage loans, especially for families that otherwise might not qualify or who may experience other barriers to mainstream lending.’

Repeat Homebuyers

Interestingly, the NeighborWorks America research shows that even repeat homebuyers benefit from receiving quality housing counseling and education. According to the report, repeat homebuyers who received housing counseling also are about one-third less likely to fall 90 days or more behind in their mortgages than repeat homebuyers who didn’t receive housing counseling and education.

“More analysis is required to determine the factors for the repeat homebuyer results,” said Fitzgerald. “But one thing is clear from the data: NeighborWorks pre-purchase housing counseling and education is effective, even if you’ve been a homeowner before.”

Read the report executive summary here >>

About NeighborWorks America
For 35 years, NeighborWorks America has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $19.5 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.

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Link to a copy of this press release >>


BCL of Texas Helps Launch National “Home Matters” Movement

Today BCL of Texas helped launch a new national movement called Home Matters™, which aims to build public support for the essential role that Home plays as the bedrock for thriving lives, families, and a stronger nation. Home Matters is spearheaded by National NeighborWorks® Association – of which we are a member – along with a coast-to-coast coalition of housing and community development organizations, other nonprofits, companies, and the public at large.

As it expands, Home Matters will go beyond housing and illuminate the connections between stable housing and other important facets of American life such as:

  • Individual Success: Home recharges adults and children alike for the day ahead.
  • Education: Children in stable homes learn and achieve more in school.
  • Health: Healthy habits take root more easily in stable affordable homes.
  • Public Safety: Stable homes make communities safer.
  • A Strong Economy: Homes that are affordable are crucial to a vibrant job-generating economy.

I hope that you will visit the Home Matters website (www.HomeMattersAmerica.com), share your insights, tell your colleagues and friends about the movement, and connect to it through Facebook and Twitter. It’s time for the crucial roles that Home plays to be more broadly understood.

Contact us at (877) 688-7457 to learn more about Home Matters and how BCL of Texas supports homeownership through home buyer education, counseling and assistance programs.

NeighborWorks America Launches NeighborWorks Alliance Of Texas

Alliance Supports Texas Communities by Empowering Consumers to Make Wise Housing Decisions and Strengthen Their Financial Future  

WACO, TX– Today NeighborWorks America launched the NeighborWorks Alliance of Texas, an agreement between 13 regional housing organizations dedicated to expanding and preserving housing opportunities for all Texas residents. This is the tenth alliance formed by member organizations of NeighborWorks America, the country’s preeminent leader in affordable housing and community development.

The NeighborWorks Alliance of Texas, which aims to revitalize communities, was formed to provide leadership and advocacy, raise capital, support peer-to-peer learning and advance housing and community development issues around the state. The organizations include the following: Affordable Homes of Texas, Inc.; Alamo Area Mutual Housing Association, Inc., Avenue Community Development Corporation; BCL of Texas; Fifth Ward Community Redevelopment Corporation, Foundation Communities; Laredo-Webb Neighborhood Housing Services, Inc.; NeighborWorks Waco; Neighborhood Housing Services of Dimmit County, Inc.; Neighborhood Housing Services of San Antonio, Inc.; Nueces County Community Action Agency; Tejano Center for Community Concerns; and Tierra del Sol Housing Corporation. Between 2007 and 2011, NeighborWorks organizations in Texas served over 35,000 customers, with over 17,000 households receiving pre-purchase, post-purchase, or foreclosure education; customers purchased over 4,000 homes from NeighborWorks organizations or with NeighborWorks organizations’ assistance. NeighborWorks organizations in West Texas produced 67 single family homes and 490 multi-family rental homes between 1992 and 2012 with a direct investment of $41.4 million.

“With this new collaboration NeighborWorks builds on the strength of the network,” said Roy Nash, President and CEO, NeighborWorks Waco, and Chair, NeighborWorks Alliance of Texas. “All Texas residents deserve the best information on housing opportunities. NeighborWorks America has been a trusted resource for over thirty years, and now the NeighborWorks Alliance of Texas can provide increased value to our region. We know Texans’ specific needs and will educate and motivate Texans to make the tough financial choices that allow for long-term housing success.”

“We’re delighted that the NeighborWorks Alliance of Texas is coming together as a unified force of top NeighborWorks organizations to help consumers,” said Eileen Fitzgerald, NeighborWorks America CEO.


NeighborWorks America has the following alliances: NeighborWorks Alliance of Kentucky,

NeighborWorks Alliance of New York State, NeighborWorks Alliance of Vermont, NeighborWorks Alliance of Utah, NeighborWorks Collaborative of Ohio, NeighborWorks Alliance of Tennessee, NeighborWorks Alliance of Texas, NeighborWorks Alliance of Wisconsin, and NeighborWorks Association of Pennsylvania.

The NeighborWorks network consists of more than 235 independent, community-based nonprofit organizations serving more than 4,500 communities nationwide.  For more information on NeighborWorks America, go to www.nw.org. For more information on the NeighborWorks Alliance of Texas, contact Roy Nash at 254-752-1647 x208 or roynash@nw-waco.org.

About NeighborWorks Alliance of Texas

NeighborWorks Alliance of Texas works together to build stronger communities throughout the state of Texas. The NeighborWorks Alliance of Texas is comprised of 14 regional nonprofit housing organizations dedicated to expanding and preserving housing opportunities for all Texas residents. Neighborhoods and communities are stronger when Texans have the economic and social stability that long-term housing brings.

About NeighborWorks® America

NeighborWorks® America, a congressionally chartered nonprofit corporation, creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $19.5 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals.


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