Report: Counseling could double chance of mortgage modification

A recent report from NeighborWorks America shows that homeowners who received foreclosure counseling are almost twice as likely to have their mortgage modification approved, and at least 67 percent more likely to remain up-to-date on their monthly payments, nine months after receiving a home loan modification than those who had no counseling.

The report showed homeowners received an average of $176 per month taken off their home loan payments after working with a counselor, totaling an annual savings of about $2,100.

The report found foreclosure counseling not only helped prevent struggling homeowners lose their homes to foreclosure, but also improved homeowner activities in other ways. After counseling, borrowers showed improvement in their financial management skills and discovered healthy habits to keep them current on their loan payments.

Massachusetts Attorney General Martha Coakley is also working on providing homeowners in her state with additional support to avoid foreclosure, as well as compensate the homeowners who were wrongfully foreclosed upon by lenders demonstrating illegal foreclosure practices. Coakley recently refused to sign a deal with Countrywide Financial over its shoddy lending practices for $8.4 billion, arguing the settlement let the lender off the hook too easily, according to the Boston Globe.

Coakley also rejected settlement negotiations with five major lenders for claims of mortgage fraud, as she continues to aggressively investigate the mortgage providers and gain retribution for their wrongdoings to homeowners, the newspaper states. Coakley aims to punish the lenders as well as obtain funding and support for homeowners throughout Massachusetts who were harmed by the lenders' practices.

More News