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National Foreclosure Mitigation Counseling Program Powered By Docstoc
					              National
              Foreclosure
              Mitigation
              Counseling
              Program




National Foreclosure Mitigation Counseling Program

              Congressional Update

         Activity through August 18, 2009
Table of Contents 


Executive Summary                                                                              3

Program Administration                                                                        11
       A. Round 1 Performance                                                                 13
       B. Round 2 Progress                                                                    15
       C. NFMC Program Legal Assistance Progress                                              15
       D. Round 3 Awards                                                                      16
       E. Administration                                                                      19
       F. Making Home Affordable and the NFMC Program                                         22

Training Efforts                                                                              24
        A. Foreclosure Counseling Scholarships                                                24
        B. E-Learning Courses                                                                 28
        C. Evaluating NFMC Program Training Activities                                        28

Counseling Efforts                                                                            30
       A. Geographic Information                                                              30
       B. Client Information                                                                  33
       C. Loan Information                                                                    38
       D. NFMC Program Service to Low-Income and Minority Zip Codes                           45
       E. Counseling Outcomes                                                                 47

NFMC Program Legal Assistance Efforts                                                         50

Urban Institute Interim Report                                                                52
       A. Background and Key Findings                                                         52
       B. NFMC Program’s Effect on Foreclosure Cures                                          53
       C. NFMC Program’s Effect on Loan Modifications                                         54
       D. NFMC Program’s Effect on Foreclosure Avoidance                                      54
       E. Conclusion                                                                          56

Counseling Successes and Challenges                                                           57

Client Stories                                                                                72

Appendices
      A. Text of Legislation for Rounds 1, 2 and 3
      B. List of Grantees in Rounds 2 and 3 by State
      C. Additional Data on Counseling Efforts
      D. Urban Institute Interim Report
      E. Round 1 and 2 Maps
      F. Round 3 Maps




           2|Page          National Foreclosure Mitigation Counseling Program Congressional Update
                                        Program administered by NeighborWorks® America
                                                                               November 16, 2009
Executive Summary

NeighborWorks® America (as authorized by the Neighborhood Reinvestment Corporation Act, 42 U.S.C.
8101-8107) submits this update to Congress to announce that as of August 18, 2009, more than 630,000
families facing foreclosure have been counseled through the National Foreclosure Mitigation Counseling
(NFMC) Program, and that thousands of housing professionals have been trained in foreclosure
intervention to help address the nation’s housing crisis.

The NFMC Program was created by the Consolidated Appropriations Act of 2008 (P.L. 110-161) in
December 2007 to address the subprime foreclosure crisis. The legislation named NeighborWorks
America administrator of the $180 million program. On July 30, 2008, the Housing and Economic
Recovery Act of 2008 (P.L. 110-289) appropriated an additional $180 million to the NFMC Program,
including $30 million for legal assistance. An additional $50 million was appropriated to the program on
March 11, 2009 through the Omnibus Appropriations Act of 2009 (P.L. 111-8).

NeighborWorks is proud to have been entrusted to administer the program, and continues to ensure it is
done so fairly and transparently. As of August 18, 2009, the NFMC Program has funded 720,488 units of
foreclosure mitigation counseling with 633,294 homeowners nationwide, and has funded 5,237
scholarships to housing counselors for foreclosure counseling training.

In total, $381.2 million has been awarded to 166 HUD-Approved Housing Counseling Intermediaries,
State Housing Finance Agencies and NeighborWorks organizations through the NFMC Program to
provide foreclosure counseling and legal assistance to the nation’s homeowners. In February 2008, $130.4
million was awarded in Round 1 grants to 130 eligible organizations. In December 2008, $177.5 million
was awarded in Round 2 grants to 134 eligible organizations, with 54 of these organizations also being
awarded $25.1 million in legal assistance funds. In October 2009, $48.2 million was awarded in Round 3
grants to 122 eligible organizations.


Program Administration

NeighborWorks has provided three updates to Congress on the NFMC Program, in October 2008,
February 2009 and June 2009. This current report covers program activity from March 1, 2008 through
August 18, 2009, with additional information covering the awarding of the third funding round on
October 1, 2009.

    Round 1 Performance

The first funding round of the NFMC Program has officially been closed out. The 130 Grantees working
within this funding round delivered 475,118 units of counseling in all 50 states, the District of Columbia,
Puerto Rico and Guam. NeighborWorks initially awarded these Grantees a total of 459,128 units of
counseling, thus the Grantees exceeded their unit goal in this funding round.

Each counseling level was set at a maximum dollar amount per unit of counseling. For Round 1, the value
of a Level One session was set at $150, Level Two at $200, and Level Three at $350. Converting units of
counseling by the pre-set counseling level dollar amounts shows that while Grantees exceeded their goal
for units of counseling, they fell slightly short of their goal of counseling by dollar amount as a higher
number of clients were reported at Level One than anticipated. Grantees delivered $95.5 million in



           3|Page             National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
                                                                                        November 16, 2009
counseling, with an additional $28.5 million utilized to strengthen their counseling programs and
outreach efforts.

Round 1 of the program was scheduled to run from March 1, 2008 through December 31, 2008. The
majority of Grantees – 101 out of 129 – were not able to complete their grant obligation by the program
end date. The NFMC Program granted a six-month extension to these organizations, which extended the
grant performance period to June 30, 2009. Grantees that were unable to complete their production goals
by this date either had their remaining funds recaptured, meaning the Grantee had to return a specific
dollar amount of already disbursed yet unspent funds to the NFMC Program, or de-obligated, meaning
the NFMC Program rescinded its responsibility to disburse money awarded to a Grantee. Thirty-five
Grantees were unable to complete their Round 1 grant obligation within the extension timeframe and had
funds recaptured or de-obligated. In total, $8,698,780 in unused funds was recaptured and/or de-
obligated.

More information regarding the overall administration of Round 1 of the NFMC Program will be
provided in a subsequent close-out report, to be delivered to Congress early next year.

        Round 2 Performance

The second round of the NFMC Program resulted in $177.5 million in counseling funds being awarded
on December 3, 2008 to counseling agencies around the nation. As of August 18, 2009, the 134 Grantees
working within the second round have delivered 245,370 units of counseling, or 42% of the round’s goal.
In Round 2, the value of a Level One session was set at $150, Level Two at $300, and Level Three at $450.
Converting units of counseling by the pre-set counseling level dollar amounts shows that Grantees have
delivered $58.8 million in counseling, with an additional $14.7 million being utilized to strengthen their
counseling programs and outreach efforts.

The funding round officially began on January 1, 2009, and runs through December 31, 2009. As with
Round 1, requests for extensions will be granted through June 30, 2010, and NeighborWorks has reserved
the right to recapture or de-obligate funds from Grantees who do not utilize their full award amount or
make substantial progress toward meeting their production goals.

    Legal Assistance Program

The second round of funding also appropriated $30 million to fund services for NFMC Program clients
with legal issues arising from their foreclosure, delinquency, or short sale. Fifty-four organizations were
awarded $25.1 million for this effort on December 3, 2008.

The legal assistance component is expected to fund legal assistance to 45,000 households. As of August
18, 2009, 2,530 homeowners, or 6% of the goal, had received legal assistance through the NFMC Program.
Most Grantees experienced start-up challenges, which resulted in production delays. Grantees have
solidified their relationships with legal entities that will perform the legal assistance work, and the report
rate will increase in the coming months. As with NFMC Program counseling funds, NeighborWorks has
reserved the right to recapture or de-obligate funds from Grantees who do not utilize their full award
amount or make substantial progress toward meeting their production goals.

    Awarding of Round 3 Funds

The Omnibus Appropriations Act of 2009 (P.L. 111-8) appropriated $50 million to the program, of which
$43 million was to be awarded to eligible Applicants for foreclosure counseling. Demand for counseling
funds continues to remain strong; the 124 Applicants requested a total of $148.7 million in funds. The

           4|Page             National Foreclosure Mitigation Counseling Program Congressional Update
                                             Program administered by NeighborWorks® America
                                                                                          November 16, 2009
total amount requested would have been significantly higher, as NeighborWorks placed a cap of $8.7
million on the amount that could be requested by Applicants. Seven organizations requested the full
amount. The funding was made available on October 1, 2009, in addition to $8,698,780 unspent by
Grantees from Round 1 that was recaptured or de-obligated, to 122 successful Applicants.

NeighborWorks initially awarded $48,198,780, and the balance of $3.5 million will be held to be awarded
at a later date. It is estimated that the total funds awarded ($48,198,780) will provide 192,042 units of
foreclosure counseling assistance to at least 128,563 homeowners. This funding round will begin
retroactively on July 1, 2009 and run through June 30, 2010.

Applications were evaluated based on the extent to which the Applicant had: sufficient demonstrated
experience with providing foreclosure counseling services; the ability to certify they met or exceeded the
minimum standards for approval as a HUD housing counseling agency; counselors with experience and
training in providing foreclosure counseling; the capacity to measure results; goals that were realistic
given past performance; sufficient program progress where applicable; adequate marketing and outreach
plans; service to low-income and minority homeowners or zip codes; and the ability to provide adequate
quality control of services offered. Penetration into areas of greatest need was also considered in the final
award determination.

The legislation governing the third appropriation had requirements that NeighborWorks adhered to in
the application process. Below are brief descriptions of those requirements and how they were met:

        Award the Majority of Funds to Areas of Greatest Need: NeighborWorks utilized
        LoanPerformance.com and Home Mortgage Disclosure Act (HMDA) data from December 2008
        (the latest data available at the time of the July funding announcement) to determine the areas of
        greatest need, using the same criteria as was used in the previous funding rounds. In total, 199
        Metropolitan Statistical Areas and the rural areas of 30 states were defined as being areas of
        greatest need. In total, 88% of counseling units were awarded to serve these areas.

        Certification of Absence of Conflict of Interest: NeighborWorks certified that it did not
        demonstrate any conflict of interest in awarding grants to NeighborWorks organizations.
        Throughout the process, the same standards, criteria, and review process was used for both
        NeighborWorks organizations and Intermediary/HFA applications. The process only varied
        when criteria for Intermediaries and HFAs were not relevant for NeighborWorks organizations,
        as they do not pass funds through to a network of Sub-grantees, branches or affiliates as do HFAs
        and Intermediaries. The total awarded directly to NeighborWorks organizations was $7,747,380,
        which was 15% of the total amount available to be awarded of $51,698,780.

    Low Income and Minority Homeowners and Zip Codes

In Round 3, the NFMC Program continues its commitment to funding organizations that target outreach
to low-income and minority populations. While Round 3 is not controlled by the same statutory
requirements as Round 2, the proposed funding for Round 3 reflects a similar high priority on providing
resources to these individuals and communities. In Round 3, $16,234,700 (or 32% of available grant funds)
was awarded to 29 organizations that received the maximum possible score on application questions
pertaining to their outreach to low-income and minority homeowners and zip codes, and
have reported performance in Round 2 of the NFMC Program that indicates successful outreach and
service delivery to low-income and minority populations.

A total of 102 Grantees are targeting their NFMC Program foreclosure services to zip codes that are
predominately low-income or minority. Of these, 37 plan to perform at least half of their awarded

           5|Page             National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
                                                                                         November 16, 2009
counseling work to these areas. It is projected that 29% of all counseling (or 56,493 units) will be provided
to those zip codes in Round 3. In addition to serving communities with high concentrations of minority
and low-income people, many Grantees target their services to low-income and minority homeowners,
no matter where they reside. Based on information obtained in the applications, it is projected that at least
43% of all NFMC Program Round 3 counseling (or 82,482 units) will be provided to low-income or
minority homeowners. Grantees in the program consistently report an even higher rate of delivery to
these populations than predicted within their applications.

    Making Home Affordable and the NFMC Program

On February 18, 2009, President Obama announced a new Homeownership Affordability and Stability
Plan which will allow homeowners facing foreclosure to refinance or modify their mortgages. Details of
this plan and the Making Home Affordable program were announced on March 4, 2009.

Homeowners who receive trial loan modifications from their servicer but have a back end debt to income
ratio at or above 55% must agree to meet with a counselor from a HUD-approved housing counseling
agency or NFMC Program participating agency. This counseling will be considered a new level of
counseling under the NFMC Program – “Level Four,” and will be valued at $450.

It is anticipated that up to four million homeowners will be eligible for assistance through the Making
Home Affordable modification program, and that of these homeowners, roughly 240,000 to 320,000 will be
referred to counseling with a back end debt to income ratio at or above 55%. The Making Home Affordable
program did not include funding for these services, but all Grantees working in any round of the NFMC
Program are able to use up to 30% of their funding to support their Level Four activities.

Since July 2009, the NFMC Program has been holding feedback calls with counselors of Grantees and
Sub-grantees to gather feedback on how the Making Home Affordable program is being implemented
around the nation. Several themes have arisen, which can be broken down into three categories: (1)
difficulty trying to communicate with servicers; (2) servicers are not following the guidelines of the
Making Home Affordable program; and (3) frustrations with the system as a whole. The NFMC Program
has shared detailed feedback from counselors with the U.S. Department of the Treasury, servicers,
regulatory agencies, the U.S. Government Accountability Office, HOPE NOW, Fannie Mae and Freddie
Mac to ensure the Making Home Affordable program’s success.


Training Efforts as of August 18, 2009

Since the NFMC Program’s commencement, its training funds have enabled NeighborWorks to
strengthen housing counselor capacity in foreclosure counseling by providing scholarships to six
NeighborWorks Training Institutes and 74 Place-Based Trainings. Through August 18, 2009, 5,237
scholarships have been provided by the NFMC Program for counselors to participate in these training
opportunities.

        NeighborWorks Training Institutes: NeighborWorks Training Institutes (NTIs) are “mobile
        universities” dedicated to providing superior training and continuing professional education in
        community development and affordable housing. On average, more than 100 courses are offered
        at each NTI.

        Place-Based Trainings: NeighborWorks hosts regional multi-course Place-Based Trainings (PBTs)
        with its district offices and with HUD-Approved Housing Counseling Intermediaries and State
        Housing Finance Agencies. These events enable counselors to receive training locally on a more

           6|Page             National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
                                                                                         November 16, 2009
        frequent schedule than the quarterly NTIs. They are designed to accommodate between 200 to
        225 participants each, and offer six to eight foreclosure-related courses.

The funding also enabled NeighborWorks to create two e-learning courses: Foreclosure Basics and
Understanding and Applying Foreclosure Intervention and Loss Mitigation Tools, and provided scholarships
for counselors to take the courses. Scholarships will be available for those who are eligible to take both
online courses through December 31, 2009. Since March 2008, 3,692 certificates of completion have been
earned for these courses.


Counseling Efforts as of August 18, 2009

Clients Counseled Through the NFMC Program:

            The majority of NFMC Program clients (53%) continue to be minority homeowners (defined
            as African American, Hispanic, American Indian/Alaskan Native, Asian, Pacific Islander,
            and clients listing two or more ethnic backgrounds), while minority homeowners make up
            27% of homeowners in the country. Whites represent 41% of all clients, African Americans
            account for 27%, Hispanics represent 21%, and Asians account for 3%.

            Of all NFMC Program clients that hold mortgages with interest rates at or above 8%, 36% are
            African American, yet African Americans only hold 20% of the nation’s subprime mortgages.
            Eighteen percent (18%) of NFMC Program clients holding mortgages with high interest rates
            are Hispanic, and 20% of Hispanic homeowners hold these mortgages. Only 2% of NFMC
            Program clients with these loans are Asian, while they hold 4% of national subprime loans.

            More than half of all clients held a fixed rate mortgage (56%), with 43% of clients holding a
            fixed rate mortgage with an interest rate below 8%. Thirty-three percent (33%) held an
            adjustable rate mortgage (ARM). However, only 18% of mortgages nationwide are ARMs.

            For the first time in the program all ethnicities were more likely to hold fixed rate mortgages
            than ARMs. African American NFMC Program clients were nearly twice as likely to hold
            fixed rate mortgages (56%) than ARMs (33%); Hispanic clients were slightly more likely to
            hold fixed rate mortgages (48%) than ARMs (41%); Asian clients were nearly as likely to hold
            ARMs (44%) as fixed rate mortgages (46%); and White clients were more than twice as likely
            to hold fixed rate mortgages (63%) than ARMs (27%).

            Thirty-three percent (33%) of NFMC Program clients reside in zip codes where the majority
            of residents are minorities (27% of the overall U.S. population lives in these zip codes); and
            25% of clients reside in zip codes with less than 80% of the Area Median Income (AMI) (20%
            of the overall U.S. population lives in these zip codes).

            Sixty-six percent (66%) of NFMC Program clients report having household income less than
            80% of their Area Median Income (AMI), and 42% report having incomes less than 50% AMI.

            Fifty-four percent (54%) of homeowners seeking NFMC Program counseling reported the
            reason they are facing foreclosure was a reduction in or loss of income. This percentage has
            increased steadily throughout the course of the program – the percentage was 49% in the
            June 2009 update, 45% in the February 2009 update, and 41% in the October 2008 update.
            Only 5% reported they were in default because their loan payment had increased.


           7|Page            National Foreclosure Mitigation Counseling Program Congressional Update
                                           Program administered by NeighborWorks® America
                                                                                        November 16, 2009
            More than half of all homeowners (54%) receiving NFMC Program counseling services were
            fewer than 60 days late on their mortgage upon first contact with an NFMC Program
            Grantee. Thirty-three percent (33%) were current on their mortgage at intake. However, more
            than one in five (22%) was over 120 days delinquent.

            Roughly 39% of NFMC Program clients paid more than 50% of their income toward housing
            costs. Twenty percent (20%) paid more than 75% of their income on housing costs. The
            Making Home Affordable modification program dictates that servicers should work with
            homeowners seeking modifications to reduce their front end ratio to 31% of their income. In
            the NFMC Program, 71% of clients pay more than 30% of their income to housing costs.

            Sixty-two percent (62%) of NFMC Program clients were between the ages of 35 and 54, and
            22% were over the age of 55.

            The NFMC Program has delivered 586,537, or 81%, of the total units of counseling to date to
            defined areas of greatest need.

            As of August 18, 2009, 16% of NFMC Program clients lived in low-income minority
            community (LIMC) zip codes. LIMCs are defined as zip codes with a majority population
            being minority; 30% of minorities being homeowners; and the median income of the zip code
            being less than 80% of the area median. These 1,284 LIMC zip codes account for 4% of all zip
            codes where NFMC Program activities were reported. Thus, homeowners are four times
            more likely to get NFMC Program counseling if they live in a LIMC.

            In total, 2,530 NFMC Program clients have been referred for legal assistance that is funded
            through the program. Clients can receive numerous services from the legal entity with whom
            they meet. The most common types of legal assistance are a review of the homeowner’s case
            file (83% of clients received this service), advising the homeowner on legal rights and options
            in foreclosure (79%), and interpreting loan documents (70%).


Urban Institute Analysis of Outcomes

In October 2009, the Urban Institute presented NeighborWorks with the results of preliminary analyses
that attempt to measure the effectiveness of the NFMC Program on counseled homeowners. The Urban
Institute conducted analyses to determine the following:

            Did the NFMC Program help homeowners cure an existing foreclosure?
            Did the NFMC Program help homeowners receive loan modifications that resulted in lower
            monthly payments than they would have otherwise received without counseling?
            Did the NFMC Program help homeowners avoid foreclosure?

To answer these questions, researchers used a series of multivariate models to determine the impact of
counseling in each of the cases listed above. The models were estimated on a representative sample of the
approximately 300,000 homeowners who received NFMC Program counseling during the first twelve
months of the program (January through December 2008) and a comparison sample of non-NFMC
Program counseled homeowners. Data included detailed characteristics of the mortgage loans and
borrowers, which were used to control for differences between the two samples, as well as information
on the performance of mortgage loans (foreclosure and delinquency status) through December 2008.
This preliminary evaluation of program effects indicates that the initial answer to each of these questions
is “Yes,” although the magnitude of the effects varies depending on the particular outcome.

           8|Page            National Foreclosure Mitigation Counseling Program Congressional Update
                                           Program administered by NeighborWorks® America
                                                                                       November 16, 2009
Key Findings:

            The NFMC Program was effective at helping homeowners cure an existing foreclosure. Many
            NFMC Program clients (28%) entered counseling already in foreclosure or entered
            foreclosure after starting counseling. During the first year of the program, counseled
            homeowners were about 1.6 times as likely to get out of foreclosure, and avoid a foreclosure
            completion, than they would have been had they not received NFMC Program counseling.
            Loan modifications received by NFMC Program clients resulted in significantly lower
            mortgage payments than would have been received without the help of the program. Lower
            monthly payments help reduce the likelihood of a subsequent recurrence of borrower
            mortgage problems. On average, it is estimated that NFMC Program clients who received
            loan modifications reduced their monthly payments by $454 more than they would have
            without NFMC Program counseling.
            The NFMC Program somewhat reduced the likelihood that counseled homeowners would
            end up in foreclosure. Urban Institute estimated that the NFMC Program helped
            approximately 880 clients avoid going into foreclosure through December 2008. That is, the
            number of homeowners who were moderately delinquent (two or three months) and
            experienced a foreclosure would have been 4,975 compared to the 4,095 actual foreclosures
            estimated. By helping to avoid these foreclosures, the NFMC Program created potential cost-
            savings of $33 million between January and December 2008.

The Urban Institute will continue its evaluation of the program by analyzing additional NFMC Program
clients and tracking their loan performance over time. A final report covering Round 1 clients will be
provided in June 2010.

Counseling Successes and Challenges

The NFMC Program has conducted an in-depth analysis of all successes and challenges counselors have
reported as they provide foreclosure counseling to the nation’s homeowners. This section of the report is
more robust than previous reports, and contains significant information about what counselors face in
their work.

    Successful Counseling Strategies:

The most frequently reported category of successful strategies pertained to creating a more efficient
counseling process (42.3%). Also commonly reported were successes using specific methods of
foreclosure counseling (31.0%). A somewhat smaller number of Grantees reported successes in
communicating with servicers (14.4%) and conducting client outreach (12.5%).

Overall, the most commonly reported individual success was helping clients create a budget and action
plan to get to the root of the client’s financial problems. More than 15% of all responses listed this as a
successful strategy. The next three most commonly reported individual successes all pertained to
implementing efficient counseling processes: holding foreclosure prevention workshops or group
orientation sessions (7.2%); increasing capacity by hiring and training additional staff, expanding
services, and making services available outside normal business hours (5.8%); and increasing efficiency
through time management, standardization, use of technology, and division of labor (5.4%).




           9|Page             National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
                                                                                         November 16, 2009
   Counseling Challenges:

The most commonly reported categories of challenges pertained to working with servicers (47.8%).
Grantees reported that the majority of the challenges they face are related to communication with
servicers, which accounted for 32.6% of total challenges. Another category of challenges Grantees
reported facing when working with servicers was obtaining workable mortgage solutions for
homeowners (15.2%). Grantees commonly reported that they encountered challenges with homeowners’
resources, as well as counselors’ interactions with homeowners (37.2%). Challenges related to program
administration accounted for the lowest proportion of challenges (15%).

Overall, the most commonly reported individual challenges reported by Grantees were that homeowners
are not prepared for counseling sessions, or do not follow through with counselors (11.8% of all
responses); they face general difficulty communicating with servicers (9.8%); and once they do contact
servicers, obtaining decisions from servicers on workout packages takes excessively long (8.8%). Of the
Grantees that reported this, more than a third reported that responses take at least 60 or 90 days on
average.




         10 | P a g e       National Foreclosure Mitigation Counseling Program Congressional Update
                                          Program administered by NeighborWorks® America
                                                                                    November 16, 2009
Program Administration

The National Foreclosure Mitigation Counseling (NFMC) Program was created by the Consolidated
Appropriations Act of 2008 (P.L. 110-161) in December 2007 to address the subprime foreclosure crisis.
The legislation named NeighborWorks America administrator of the $180 million program. Under this
appropriation, on February 24, 2008, NeighborWorks awarded $130.4 million to 130 Applicants to
counsel homeowners facing foreclosure around the nation. A small additional amount was held to be
awarded in the future once NeighborWorks could assess performance and need.

On July 30, 2008, the Housing and Economic Recovery Act of 2008 (P.L. 110-289) appropriated an
additional $180 million to the NFMC Program, including $30 million for legal assistance. On December 3,
2008, $177.5 million (which included the un-awarded Round 1 monies) in counseling funds was awarded
to 134 Applicants, and $25.1 million in legal assistance funds was awarded to 54 Applicants.

On March 11, 2009, the Omnibus Appropriations Act of 2009 (P.L. 111-8) appropriated $50 million to the
program, including $43 million for counseling. These funds were awarded to 122 Applicants on October
1, 2009 in addition to $8,698,780 unspent by Grantees from Round 1 which has been recaptured or de-
obligated.

In total, $381.2 million has been awarded to 166 HUD-Approved Housing Counseling Intermediaries,
State Housing Finance Agencies and NeighborWorks organizations through the NFMC Program to
provide foreclosure counseling and legal assistance to the nation’s homeowners. The breakdown of
counseling Grantees and funding by organization type is presented below.

  Table 2.1: Counseling Applicants and Grants Awarded 
                                                Number            Amount              Amount
                                                Funded           Requested            Awarded
                        Intermediaries              19          $511.1 million      $223.7 million
       State Housing Finance Agencies               38          $170.3 million       $99.7 million
        NeighborWorks Organizations                109           $60.5 million       $32.7 million
                                Total:             166          $741.9 million      $356.1 million
    Source: NFMC Program Reported Data


Another $25.1 million has been awarded to 54 Grantees for legal assistance through a special allocation
within the Round 2 funding language. The breakdown of legal assistance Grantees and funding by
organization type is presented below.

  Table 2.2: Legal Assistance Applicants and Grants Awarded 
                                                Number            Amount              Amount
                                                Funded           Requested            Awarded
                        Intermediaries              6           $10.1 million        $10.1 million
       State Housing Finance Agencies              23           $10.1 million        $10.1 million
        NeighborWorks Organizations                25            $5.3 million         $4.9 million
                                Total:             54           $25.5 million        $25.1 million
    Source: NFMC Program Reported Data




          11 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                             Program administered by NeighborWorks® America
                                                                                      November 16, 2009
From March 1, 2008 through August 18, 2009, the NFMC Program has enabled counseling agencies
throughout the nation to provide 720,488 units of foreclosure mitigation counseling to 633,294
homeowners.

In this timeframe, the NFMC Program divided counseling services into three categories of specific
activities, Level One, Level Two, and Level Three counseling. Level One counseling involves developing
a budget and action plan, with steps to address their foreclosure issues, for a client seeking assistance in
preventing foreclosure. Level Two counseling entails verifying the client’s budget, creating an action plan
and assisting the client in meeting the goals of his or her action plan. Level Three counseling entails
meeting the requirements for both Levels One and Two within the same reporting period. The end result
is the same for Levels Two and Three counseling, the only difference pertains to when the client was
reported. The program will remove Level Three counseling in Round 3 in response to Grantees’ feedback
that this option was unnecessary, as Grantees typically report clients at Level One and Two instead of
waiting to report them at Level Three.

Since an individual NFMC Program client may receive both Level One and Level Two counseling, these
sessions are counted and referred to as “units” of produced counseling. Units of counseling will be larger
than the number of individual clients/homeowners served, as any client can receive both Level One and
Level Two counseling.

Overall, the NFMC Program is projected to provide 1,238,743 units of foreclosure counseling, 459,128
through the first funding round, 587,573 through the second funding round, and 192,042 through the
third round, which was awarded on October 1, 2009. This report analyzes units of counseling reported
through August 18, 2009. As of this date, a total of 1,046,701 units had been awarded in Rounds 1 and 2,
and 69% of these units – 720,488 – have been delivered.

  Table 2.3: Round 1 and 2 Counseling Units Delivered 
                                                            Total Units
                                    Units Awarded in                             Goal Achieved
                                                           Delivered in
                                     Rounds 1 & 2                                (Rounds 1 & 2)
                                                           Rounds 1 & 2
       Level One                          608,229             457,997                 75%
       Levels Two and Three               438,472             262,491                 60%
                       Total:            1,046,701            720,488                 69%
    Source: NFMC Program Reported Data


Each counseling level was set at a maximum dollar amount per unit of counseling. For Round 1, the value
of a Level One counseling session was set at $150, Level Two at $200, and Level Three at $350. For Round
2, the value of a Level One counseling session remained set at $150, Level Two increased to $300, and
Level Three increased to $450. Combining both NFMC Program rounds and converting each delivered
unit by their appropriate pre-set counseling level dollar amounts, the NFMC Program has delivered a
total of $153.3 million in foreclosure mitigation counseling out of the awarded $283.7 million (Table 2.4).
Removing the recently awarded Round 3 funds from the analysis, as these funds have yet to be utilized
by Grantees, Grantees have delivered 62% of Round 1 and Round 2 funds.




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  Table 2.4: Round 1 and 2 Counseling Units Delivered Converted into Dollars 
                                    Counseling Units      Total Counseling
                                      Awarded in          Units Delivered in    Goal Achieved
                                    Rounds 1 & 2, in      Rounds 1 & 2, in      (Rounds 1 & 2)
                                        Dollars                Dollars
       Level One                          $91,234,350         $68,699,550             75%
       Levels Two and Three              $154,124,550          $84,638,550            55%
                       Total:            $245,358,900         $153,338,100            62%
    Source: NFMC Program Reported Data


In addition to receiving awards to directly fund their counseling sessions, NFMC Program awards also
include monies to help Grantees administer the program, meet reporting requirements, and improve
their foreclosure counseling delivery system. Out of the total $356.1 million that has been awarded in all
three funding rounds, $283.7 million is intended to fund counseling sessions while the remaining $72.4
million is intended to support Grantees’ administration, reporting and system improvements.

When looking at production over the course of the program, initially it was slow. This is attributed to
several reasons, including the start-up time for Grantees to get the program operational, and the
marketing of the counseling’s availability. Figure 2.1 presents production in the NFMC Program by
month. The numbers are based on when the unit of counseling was reported to the program. The
program officially began on March 1, 2008, but the analysis begins in May 2008 as data collection was not
available until then. The spike in June 2009 was a result of Grantees reporting their counseling production
prior to the close-out of Round 1, which happened on June 30, 2009.

  Figure 2.1: Round 1 and 2 Units Delivered by Month

  140,000
  120,000
  100,000
   80,000
   60,000
   40,000
   20,000
        0
             May- Jun-   Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun-        Jul- Aug-
              08   08     08   08   08   08   08   08   09   09   09   09   09   09          09   09

    Source: NFMC Program Reported Data



Round 1 Performance

In the first funding round of the NFMC Program, $130.4 million of the available $167.8 million was
awarded to eligible Applicants. The remaining $37.4 million was held until performance and need were
further assessed. The funding round was scheduled to run from March 1, 2008 through December 31,
2008. The majority of Grantees – 101 out of 129 – were not able to complete their grant obligation by the
December 31, 2008 program end date. The NFMC Program granted a six-month extension to these
organizations, which extended the grant performance period to June 30, 2009. Round 1 has officially been
closed out, and the NFMC Program will be submitting a Round 1 final report to Congress early next year

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with additional information on the Grantees working in Round 1 and the clients served in this initial
funding round.

Grantees that were unable to complete their production goals by this date either had their remaining
funds recaptured, meaning the Grantee had to return a specific dollar amount of already disbursed yet
unspent funds to the NFMC Program, or de-obligated, meaning the NFMC Program rescinded its
responsibility to disburse money awarded to a Grantee. Thirty-five (35) Grantees were unable to
complete their Round 1 grant obligation within the extension timeframe and had funds recaptured or de-
obligated. In total, $8,698,780 was recaptured and/or de-obligated.

Of the $130.4 million that was awarded, $101.7 million was awarded to fund direct counseling, and $28.7
million was awarded to help Grantees administer the program, meet reporting requirements, and
improve their foreclosure counseling delivery system. The 130 Grantees awarded Round 1 funding
delivered 475,118 units of counseling in all 50 states, the District of Columbia, Puerto Rico and Guam,
which equates to $95,506,950 in counseling funds.

NeighborWorks initially awarded these Grantees a total of 459,128 units of counseling. They exceeded
their unit goal in this funding round. A breakdown of units delivered is below. The requirements for
reporting a client at Level Two is the same as reporting them at Level Three, the determination of
whether a Grantee reports a client at Level Two versus Level Three is the timeframe of when that client
received the counseling – if the client received Level One and Two counseling within the same NFMC
Program reporting period, they are reported as a Level Three client. If a client received Level One
counseling during one reporting period and Level Two counseling during another reporting period, they
are reported once at Level One and then later at Level Two. The program will remove Level Three
counseling effective with Round 3 as Grantees provided feedback that this option was unnecessary, as
they typically report clients at Level One and Two instead of waiting to report them at Level Three.
Because the end results of Levels Two and Three are the same, in the following analyses units of Levels
Two and Three are presented together.

  Table 2.5: Round 1 Counseling Units Delivered  
                                          Total Units       Total Units     Program Goal
                                           Awarded          Delivered         Achieved
       Level One                            251,135           298,181           119%
       Levels Two and Three                 207,993           176,937            85%
                         Total:             459,128           475,118           103%
    Source: NFMC Program Reported Data


Table 2.6 presents the total dollar amount delivered by converting units of counseling by the pre-set
counseling level dollar amounts. While Grantees exceeded their goal for units of counseling, they fell
slightly short of their goal of counseling by dollar amount as a higher number of clients were reported at
Level One than anticipated.

  Table 2.6: Round 1 Counseling Units Delivered Converted into Dollars 
                                    Total Counseling     Total Counseling
                                                                              Program Goal
                                     Units Awarded,      Units Delivered,
                                                                                Achieved
                                       in Dollars           in Dollars
        Level One                        $37,670,250        $44,727,150           119%
        Levels Two and Three             $64,074,000        $50,779,800           79%
                        Total:           $101,744,250       $95,506,950           94%
    Source: NFMC Program Reported Data


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Round 2 Progress

The second round of the NFMC Program included $177.5 million in awarded counseling funds. This
included the $137.8 available through P.L. 110-289, $37.4 million not awarded in the first round of
funding, and $2.3 million in funds recaptured during Round 1. The funding round officially began on
January 1, 2009, and runs through December 31, 2009. As with Round 1, if requested, extensions will be
granted through June 30, 2010. Previous NFMC Program Congressional reports have addressed the
application and award process.

As of August 18, 2009, the 134 Grantees working within the second round of the NFMC Program have
delivered 245,370 units of counseling, or 42% of the round’s goal. Many Grantees began working on this
round of funding only recently – after they completed their Round 1 production, and thus this high level
of production has been delivered in a shortened timeframe. Table 2.7 details the units awarded and
delivered.

  Table 2.7: Round 2 Counseling Units Delivered 
                                           Total Units       Total Units        Program Goal
                                            Awarded          Delivered            Achieved
       Level One                             357,094           159,816              45%
       Levels Two and Three                  230,479            85,554              37%
                         Total:              587,573           245,370              42%
    Source: NFMC Program Reported Data


Table 2.8 presents the total dollar amount delivered by converting units of counseling by the pre-set
counseling level dollar amounts.

  Table 2.8: Round 2 Counseling Units Delivered Converted into Dollars 
                                         Total Counseling    Total Counseling
                                                                                    Program Goal
                                         Units Awarded, in   Units Delivered,
                                                                                      Achieved
                                              Dollars           in Dollars
        Level One                          $53,564,100          $23,972,400               45%
        Levels Two and Three               $90,050,550          $33,858,750               38%
                         Total:            $143,614,650         $57,831,150               40%
    Source: NFMC Program Reported Data



NFMC Program Legal Assistance Progress

The Housing and Economic Recovery Act of 2008 (P.L. 110-289) also appropriated $30 million to fund
services for NFMC Program clients with legal issues arising from their foreclosure, delinquency, or short
sale. Fifty-four organizations were awarded $25.1 million on December 3, 2008. All funds not awarded
were returned to the United States Treasury.

The NFMC Program legal assistance component is expected to fund legal assistance to 45,000 households.
As of August 18, 2009, 2,530 homeowners had received legal assistance through the program, or 6% of the
projected program goal. Most Grantees experienced start-up challenges for this new aspect of program
operations, which resulted in production delays. Grantees have now solidified their relationships with
legal entities that will perform the legal assistance work, and the report rate will increase in the coming
months. As with NFMC Program counseling funds, NeighborWorks has reserved the right to recapture


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or de-obligate funds from Grantees who do not make substantial progress toward meeting their
production goals.

NFMC Program Grantees who were awarded legal assistance funds administer the funds by contracting
locally with legal service providers, hiring attorneys or facilitating referrals from housing counselors to
attorneys. By statute, priority for the legal assistance funds was given to the metropolitan statistical areas
with the highest home foreclosure rates. Fifty-two of the 54 Grantees committed to provide at least 60%
of their legal assistance in those areas, and 86% of all legal assistance has been provided to clients in these
MSAs.


Round 3 Awards

On March 11, 2009, the Omnibus Appropriations Act of 2009 (P.L. 111-8) appropriated $50 million to the
NFMC Program, of which $43 million was to be awarded to eligible Applicants. This round of funding
was made available on October 1, 2009 to 122 successful Applicants, in addition to $8,698,780 unspent by
Grantees from Round 1 which has been recaptured and/or de-obligated. The Funding Announcement
detailing program design, published on July 20, 2009, can be found at www.nw.org/nfmc.

NeighborWorks announced that up to $58,000,000 could possibly be available in foreclosure intervention
counseling in the Funding Announcement. An exact amount was not available at that time, as the amount
of unspent Round 1 funds that needed to be recaptured and/or deobligated from Grantees had not yet
been determined. Once the recapture and deobligation process was complete, a total of $51,698,780 was
available to compete for Round 3 of the NFMC Program.

NeighborWorks initially awarded $48,198,780, and the balance of $3.5 million will be held to be awarded
at a later date. It is estimated that the total funds awarded ($48,198,780) will provide 192,042 units of
foreclosure counseling assistance to at least 128,563 homeowners before June 30, 2010.

One of the eligible Applicants for the NFMC program is Acorn Housing Corporation (AHC), and they
requested nearly $8.7 million in Round 3. NeighborWorks has withheld a decision on AHC’s application
for Round 3 funding under the NFMC Program and has instructed AHC to cease performance on their
NFMC Program Round 2 contract, except for work-in-progress with existing clients (existing clients
defined as clients for whom intake was completed on or before September 30, 2009) until the implications
of the recently enacted Continuing Resolution can be determined as well as the results of reviews
NeighborWorks is conducting to determine if anything else has affected AHC’s eligibility to participate in
the program.

As the application process had worked efficiently in the previous funding rounds, NeighborWorks
adopted a similar structure for awarding the new funds. The only material difference in the process was
that Grantees that had performed well in the previous rounds were able to complete a shorter
application, as NeighborWorks had collected a substantial amount of information on most Applicants
less than seven months earlier. Out of the 124 Round 3 Applicants, 60 were eligible to complete the
streamlined application, which required much less time.

The Funding Announcement was officially released in July, and the electronic application for funds
became available on July 17, 2009. Applications were due on August 7, 2009. NeighborWorks held
introductory Eligible Applicant Briefings on June 25 and 26, 2009, and Bidders’ Conferences on July 20,
2009, where Applicants were told what questions they would be asked on the application. Because the
amount of funding available was less than in previous rounds, no Applicant could request more than $8.7
million; based on feedback received from Grantees regarding the cost of implementing the program and

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complying with its requirements, no Applicant could request less than $50,000 in funding. A total of 124
eligible entities applied for $147.4 million in funding. Applications were reviewed and scored in August
and September, and award decisions were announced on October 1, 2009.

Applications were evaluated based on the extent to which the Applicant had: sufficient demonstrated
experience with providing foreclosure counseling services; the ability to certify they met or exceeded the
minimum standards for approval as a HUD housing counseling agency; counselors with experience and
training in providing foreclosure counseling; the capacity to measure results; goals that were realistic
given past performance; sufficient program progress where applicable; adequate marketing and outreach
plans; service to low-income and minority homeowners or zip codes; and the ability to provide adequate
quality control of services offered. Penetration into areas of greatest need was also considered in the final
award determination.

In order to keep Round 3 awards within the limits of available funds, a funding amount for each
Applicant was determined using the following four steps. First, the applications were reviewed and
scored. Second, the Applicant’s utilization rate of previous funding was considered such that priority was
given to organizations based upon when they were projected to spend down Round 2 funds. Third, an
across the board cut was applied to all recommended amounts. Finally, award caps and floors were
applied. Two organizations that applied in Round 3 did not receive funding, one of which was AHC for
the reasons described earlier. A full description of the grant evaluation process is available at
www.nw.org/nfmc.

  Table 2.9: Round 3 Counseling Applicants and Grants Awarded 
                       Number            Requested         Number            Award              Average
                       Applied            Funding          Funded            Amount             Award
  Intermediaries          16             $87 million          15           $27.4 million       $1.4 million

           HFAs           27            $40.7 million         27            $13 million         $484,000
NeighborWorks
                          81            $19.7 million         80            $7.7 million         $97,000
 Organizations
           Total:         124          $147.4 million         122          $48.1 million
        Source: NFMC Program Reported Data


Successful Applicants were sent award letters and Grant Agreements with production goals. Once a
Grantee has returned its required start-up documentation and executed Grant Agreement, a percentage
of its award is released. Additional funds are released when production goals are met, contingent on the
Grantee’s timely submission of quarterly reports, compliance with program requirements and
participation in all program evaluation processes. If a Grantee received Round 2 funds, it is the
expectation that they will complete Round 2 goals before Round 3 funds will be disbursed.

As in the previous funding rounds, if Grantees do not show substantial progress toward meeting
counseling goals, NeighborWorks has reserved the right to recapture or de-obligate awards. A Grantee
also has the opportunity to return a portion of its award to NeighborWorks if it expects that it will not
utilize the full award within the funding timeframe. These funds will be awarded to other Grantees.

Table 2.10 details the allocation of Round 3 funds by level of counseling. Based on feedback from
Grantees, the program removed Level Three counseling effective with Round 3. Grantees also receive
additional funding to help them administer the program, meet reporting requirements, and improve their
foreclosure counseling delivery system.

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  Table 2.10: Counseling Units Awarded in Round 3 
                                                     Total Counseling
                              Total Counseling
                                                     Units Awarded, in
                               Units Awarded
                                                          Dollars
        Level One                   128,563             $19,284,450
        Level Two                   63,479              $19,043,700
                    Total:          192,042             $38,328,150
    Source: NFMC Program Reported Data


    Legislative Provisions

The legislation included requirements for NeighborWorks (referred to in the legislation as Neighborhood
Reinvestment Corporation, or NRC) to incorporate into the program design. This section will detail the
statutory language regarding each of these requirements and how it was met.

(1) Areas of Greatest Need: The Omnibus Appropriations Act of 2009 (P.L. 111-8) requires that funds go
“primarily to States and areas with high rates of defaults and foreclosures primarily in the subprime
housing market,” and “grants may also be provided to approved counseling intermediaries based on a
geographic analysis of the Nation by the NRC which determines where there is a prevalence of subprime
mortgages that are risky and likely to fail, including any trends for mortgages that are likely to default
and face foreclosure.” NeighborWorks defines these areas as Areas of Greatest Need.

Fulfillment: A preliminary analysis of the 199 MSAs and 30 states with rural areas identified as areas of
greatest need as of December 31, 2008 (the latest data available to NeighborWorks at the time of the
funding announcement) shows that the successful Applicants plan to provide 88% of their services in
those areas. To determine these service levels by geographic area, NeighborWorks America is relying on
the projected geographic counseling session goals identified by Applicants in their requests for funding.
If successful Applicants have been awarded less funding than requested, their projected counseling goals
have been proportionately reduced. As grant agreements are finalized, these reduced goals may be
adjusted by geography (shifting units of counseling by MSAs or rural areas) or type of session (Level One
or Two) to reflect required operational efficiencies given the organization’s actual grant award.

(2) Certification of Absence of Conflict of Interest: The statute states that “NRC may provide up to 15
percent of the total funds under this paragraph to its own charter members with expertise in foreclosure
prevention counseling, subject to a certification by the NRC that the procedures for selection do not
consist of any procedures or activities that could be construed as an unacceptable conflict of interest or
have the appearance of impropriety.”

Fulfillment: The total awarded directly to NeighborWorks organizations is $7,747,380, which is 15% of the
total amount available to be awarded of $51,698,780. NeighborWorks certified that it did not demonstrate
any conflict of interest in awarding grants to NeighborWorks organizations. Throughout the process, the
same standards, criteria, and review process was used for both NeighborWorks organizations and
Intermediary/HFA applications. The process only varied when criteria for Intermediaries and HFAs
were not relevant for NeighborWorks organizations, as they do not pass funds through to a network of
Sub-grantees, branches or affiliates as do HFAs and Intermediaries.

    Low-Income and Minority Homeowners and Zip Codes

In Round 3, the NFMC Program continues its commitment to funding organizations that target outreach
to low-income and minority populations. While Round 3 is not controlled by the same statutory

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requirements as Round 2, the proposed funding for Round 3 reflects a similar high priority on providing
resources to these individuals and communities.

In Round 3 of the NFMC Program, $16,234,700 (or 32% of available grant funds) was awarded to 29
organizations that both:

        1.     received the maximum possible score on the Round 3 application question(s) that asked
               about their commitment to targeting outreach to low-income and minority homeowners and
               low-income and minority zip codes; and
        2.     have reported performance in Round 2 of the NFMC Program that indicates successful
               outreach and service delivery to low-income and minority populations, as reflected in their
               delivering a majority of counseling services to both low-income/minority homeowners and
               low-income/minority communities.

A total of 102 Grantees are targeting their NFMC Program foreclosure services to zip codes that are
predominately low-income or minority. Of these, 37 plan to perform at least half of their awarded
counseling work to these areas. It is projected that 29% of all counseling (or 56,493 units) will be provided
to these zip codes in Round 3. In addition to serving communities with high concentrations of minority
and low-income people, many Grantees target their services to low-income and minority homeowners,
no matter where they reside. Based on information obtained in the applications, it is projected that at least
43% of all NFMC Program Round 3 counseling (or 82,482 units) will be provided to low-income or
minority homeowners. Grantees in the program consistently report an even higher rate of delivery to
these populations.


Administration

NeighborWorks is committed to the success and transparency of the NFMC Program, and has been a
responsible steward of this appropriation in pursuit of this goal. Administration activities related to the
program include quality control and compliance, program evaluation, internal audit, board oversight,
and budget and cash management.

    Quality Control and Compliance

Mayer Hoffman McCann, a CPA firm based in Missouri, has completed their year one compliance
monitoring of NFMC Program Grantees and applicable Sub-grantees, and has begun their year two
reviews. This monitoring includes auditing Grantee compliance with their Grant Agreement and
mandatory certifications; delivery of counseling services; financial transparency (separate budget
tracking, expenditure verification, review of financial statements, etc.); compliance with program
requirements, including record retention and adequate insurance coverage; appropriate Sub-grantee
oversight; verification of service delivery through clients reported to the program; and quality of
counseling services provided.

During the year two reviews, Mayer Hoffman McCann will conduct reviews of all NFMC Program
Round 2 and Round 3 Grantees and several Sub-grantees. Of these reviews, approximately 120 will be
conducted remotely. The remaining reviews will be conducted on-site with approximately 30 Grantees
and a sample of their Sub-grantees, if applicable, selected through a risk rating system that took into
account size of award, years of experience providing foreclosure counseling, findings from A-133
reviews, litigation disclosures, prior compliance findings and other factors. Mayer Hoffman McCann will
also oversee efforts to ensure that counseling services provided met the requirements of the NFMC
Program and adhered to the National Industry Standards for Homeownership Education and Counseling –

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Foreclosure Intervention Specialty. Their consultants will conduct site visits to approximately 30 Grantees to
observe counseling sessions, counselors’ interaction with clients, and appropriateness of counselors’
recommended action plans or work-out solutions. The consultants will also review case files from
Grantees to ensure proper advice and work-out plans were delivered. Mayer Hoffman McCann’s report
is due to NeighborWorks in early 2010 and findings will be addressed to ensure the quality of counseling
provided through the NFMC Program.

    Program Evaluation

NeighborWorks competitively awarded a contract to the Urban Institute to conduct a multi-year
evaluation of the NFMC Program design and the impact of foreclosure counseling on the likelihood of
foreclosure. The Urban Institute’s previous two reports were provided to Congress with earlier NFMC
Program Congressional reports.

The Urban Institute has provided NeighborWorks with a third report, attached as Appendix D, which
presents the results of preliminary analyses that attempt to measure the effects of the NFMC Program on
counseled homeowners. Information on their findings can be found in the Urban Institute Interim Report
section of this report.

Overall, the analysis of the NFMC Program suggests that the program is having its intended effect of
helping homeowners facing loss of their homes through foreclosure. In subsequent analyses, to be
presented in the evaluation final report, the Urban Institute will estimate the program’s impact on clients
who received counseling services in 2009 and also observe loan performance over a longer period of time,
which will allow for a better measurement of the overall success of the NFMC Program.

    External Audit

NeighborWorks America’s 2008 financial performance culminated in audit results demonstrating its
overall commitment to the highest standards in fiscal accountability. The NFMC Program was
NeighborWorks’ single largest revenue and expenditure source in 2008 and was therefore extensively
tested. The corporation continued the longstanding trend with its annual audit reports including an
unqualified (or “clean”) opinion for the financial statements in their entirety, including those of the
NFMC Program, as well as the OMB Circular A-133 compliance audit. Additionally, for the third
consecutive year the corporation did not receive a management letter. For context, an audit management
letter contains observations and recommendations related to internal controls where improvements
should be made, but such observations are not required to be contained in the audit report and do not
alter the auditor’s overall opinion. Comparatively, most audits (approximately 80% to 85% by many
industry measures) result in a management letter being issued by the auditor, therefore making it highly
uncommon to have an audit firm not issue a management letter.

    Board Oversight

NeighborWorks America has an active Board of Directors which consists of senior leadership of the
Federal banking regulatory agencies and the U.S. Department of Housing and Urban Development. The
NFMC Program is a standing agenda item on the regular quarterly Board meetings as well as meetings of
the Finance, Budget and Program Committee, and the Audit Committee. Officers of the Corporation,
NFMC Program staff, and Internal Audit provide written and oral reports to the Board, respond to
members’ questions and receive input and direction during these meetings.




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As of August 18, 2009, the Members of NeighborWorks’ Board of Directors are:

      Thomas J. Curry, Chair        Director, Federal Deposit Insurance Corporation
      Julie L. Williams, Vice Chair First Senior Deputy Comptroller and Chief Counsel, Office of the
                                        Comptroller of the Currency
      John E. Bowman                Acting Director, Office of Thrift Supervision
      Elizabeth A. Duke             Member, Board of Governors of the Federal Reserve System
      Christiane Gigi Hyland        Member, Board of Directors, National Credit Union Administration
      David H. Stevens              Assistant Secretary, U.S. Department of Housing and Urban
                                        Development

Staff members of Board agencies have also been given the opportunity to participate in many aspects of
the program, from providing input into the program design and contributing as grant application
reviewers to observing the application reviewer trainings and Applicant debriefings.

    Internal Audit

NeighborWorks America’s Internal Audit team and additional temporary staff, reporting directly to the
NeighborWorks Board of Directors, continues to audit the NFMC Program, which includes individual
audits of ten aspects of the program: compliance with legislative and program requirements; quality
control of counseling services; outsourced Data Collection System; production and quarterly reporting;
grant recapture; program design, scoring and funding recommendations; complaint management;
staffing and management of outsourced services; grant disbursement and related accounting; and non-
grant expenditures, related and miscellaneous accounting.

    Budget and Cash Management

In accordance with prescribed uses of the funds as outlined in P.L. 110-161, P.L. 110-289 and P.L. 111-8
(including grants, training, administrative expenses, legal assistance grants, etc.), NeighborWorks
America prepared, and continues to monitor on an on-going basis, a comprehensive program budget for
the NFMC Program indicating the breakdown and summary of planned costs by major program and cost
category. The budget serves as a key financial control to manage all program expenditures. Additionally,
separate bank accounts were instituted for the program to effect clean segregation of funds for
management activities and fiscal accountability. Finally, components of the program design also
incorporate internal and program control elements that help to effect a proper balance of risk
management between the program objectives and financial oversight. Each of these considerations
reflects the overall commitment to preserving the high quality that NeighborWorks maintains with
regard to its financial management function.

    Grantee Website

The NFMC Program has created a private website for counselors and staff of all Grantees and Sub-
grantees working within the program. The site, www.nfmcmembers.org, includes a message board that
serves as its key component. Users post questions to each other via a list serve, and their peers respond to
their questions with useful information and guidance. As of August 18th, there were 2,085 active users on
the website, and in total roughly 2,500 counselors and staff working within the NFMC Program receive
questions and announcements that are posted on the message board. There are now 242 conversations
that have been started on the message board with 1,988 comments posted. The comments mainly pertain
to how to communicate with servicers and suggestions for clients that have been denied for loan
modifications.


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    Making Home Affordable and the NFMC Program

The Making Home Affordable program has been refined since it was announced in February, and NFMC
Program Grantees continue to ensure as many homeowners facing foreclosure as possible obtain a
modification or refinance through the program. Homeowners who contact an NFMC Program Grantee
prior to contacting their servicer about a loan modification or refinance are eligible to be counseled
through the NFMC Program. The counselor will help the homeowner determine whether they are eligible
for a refinance or modification, analyze their income and expenses, work with them to create a crisis and
long-term budget and action plan, and will advise them on alternative options if they are not eligible for
the program.

Homeowners who are eligible for a loan modification from their servicer through the Making Home
Affordable program but have a back end debt to income ratio at or above 55% will receive a trial loan
modification and must agree to meet with a counselor from a HUD-approved housing counseling agency
or NFMC Program participating agency to lower their debt ratio. Within the NFMC Program, among
other activities, counselors work with borrowers to create an Action Plan that includes steps and a
timeline to eliminate unnecessary debt, minimize expenses, increase income and create savings. The
action plan also establishes a follow-up schedule with the counselor. This counseling is considered a
new level of counseling under the NFMC Program – “Level Four,” and is valued at $450. Because this
Level Four counseling requires at least two contacts with the borrower, NFMC Program Grantees report
these clients at two points in time. After the first session, the client can be reported as a “Level 4a” at a
value of $300. Once a follow-up appointment has been completed, the client can be reported as a “Level
4b” at a value of $150.

It is anticipated that up to four million homeowners will be eligible for assistance through the Making
Home Affordable modification program, and that of these homeowners, roughly 240,000 to 320,000 will be
referred to counseling with a back end debt to income ratio at or above 55%. The Making Home Affordable
program did not include funding for these services, but all NFMC Program Grantees are able to use up to
30% of their funding to support their Level Four activities.

Since July 2009, the NFMC Program has been holding feedback calls with counselors of Grantees and
Sub-grantees to gather feedback on how the Making Home Affordable program is being implemented
around the nation. Typically 150 counselors participate in these calls, and several themes have arisen.
They are:

(1) Difficulty trying to communicate with servicers
    - Servicers will not work with counselors
    - Servicer representatives and processes are difficult in general
    - Servicers are bringing third parties and collection agencies into the process
    - Servicers change contact information frequently and require documents to be resent
    - Servicers ask for counselors’ Social Security Numbers

(2) Servicers are not following the guidelines of the Making Home Affordable program
    - Servicers will not help current homeowners and tell them to become delinquent
    - Servicers won’t disclose terms of a trial modification or payment breakdown
    - Servicers give out wrong information about the program
    - Servicers offer workouts that are not MHA
    - Servicers are not halting foreclosures while reviewing files
    - Servicers are extending trial modifications/delaying permanent modifications

(3) Frustrations with the system as a whole

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   - Servicers won’t give a reason for denial
   - It takes too long to get a response on modification requests
   - Need a central portal for submitting modification requests

The NFMC Program has shared this feedback with the U.S. Department of the Treasury, servicers,
regulatory agencies, the U.S. Government Accountability Office, HOPE NOW, Fannie Mae and Freddie
Mac to ensure the Making Home Affordable program’s success.




         23 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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Training Efforts 
Each of the three statutes funding the NFMC Program dedicated up to $5 million to training efforts to
strengthen the capacity of the nation’s housing counselors. Thousands of counselors look to
NeighborWorks every year for training in homeownership, financial education, community lending, and
post-purchase counseling. The NFMC Program training funds are utilized to expand NeighborWorks’
foreclosure-related training opportunities, offer additional regional and local training opportunities,
increase the number of courses available at these events, provide scholarships to housing counselors to
attend training events, and develop subsidized online courses which counselors and staff can complete at
their convenience.

As of August 18, 2009, 5,237 scholarships have been provided to housing counselors through the
NFMC Program, and 3,692 certificates have been earned for two online courses created with NFMC
Program training funds.


Foreclosure Counseling Scholarships

Since the NFMC Program’s commencement, its training funds have enabled NeighborWorks to provide
housing counselors with scholarships to six NeighborWorks Training Institutes (NTIs), 15 Regional
Multi-Course Placed-Based Training (PBTs), and 59 PBTs in partnership with HUD-Approved Housing
Counseling Intermediaries and/or State Housing Finance Agencies. These training opportunities have
occurred in 35 states. Between March 1, 2008, and August 18, 2009, more than 5,200 scholarships have
been provided to housing counselors.

The third NFMC Program funding round will enable NeighborWorks to provide scholarships to eligible
recipients to attend three NTIs, six Regional Multi-Course PBTs, and 20 PBTs in partnership with
Intermediaries and HFAs between September 2009 and September 2010.

To be eligible for NFMC Program-funded training activities:
        Participants must be staff of a qualified non-profit 501(c)(3) organization. This includes both
        HUD-approved housing counseling agencies (affiliates and locally-approved) and others who
        may not be approved by HUD. Board members of a qualified 501(c)(3) may submit scholarship
        applications on a limited basis. Staff of state and local municipalities may also be considered for
        scholarships. Lists of eligible organizations are pre-populated and consistently updated in the
        NFMC Program’s scholarship system. A person must be an employee of that pre-populated
        organization in order to qualify for a scholarship. When employment is in question,
        NeighborWorks requests employment verification from the organization. Every new
        organization that applies for a scholarship is researched in at least 3 IRS-qualified nonprofit
        verification web sites to confirm that the organization is registered as a 501(c)(3).
        Organizations and staff must be providing foreclosure counseling activities and/or working
        toward providing foreclosure counseling activities. When in question, NeighborWorks requests
        verification from the organization as to their counseling activities.
        Other parties wishing to take a course at an NTI (e.g., employees of private financial institutions)
        may enroll and pay market rate for their tuition and all other expenses. This is not an option at a
        PBT.

NeighborWorks Training Institutes: NeighborWorks America has been providing the highest quality
community development training for over 20 years through its NeighborWorks Training Institutes
(NTIs), held four times annually in different cities around the country. The NTI is essentially a “mobile
university” dedicated to providing superior training and continuing professional education in
          24 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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community development and affordable housing. On average, more than 100 courses are offered at each
NTI.

With NFMC Program funding, the number of foreclosure courses offered at the NTIs has increased, and
full tuition scholarships with lodging were and are provided to eligible recipients to attend any of the
NTIs from February 2008 through September 2010 for up to five days of training. A total of 885 NTI
scholarships have been provided to date through the NFMC Program.

Featured courses for the NFMC Program Training component include but are not limited to:
    HO103 Lending Basics for Homeownership Counselors (3 day course)
    HO107 Understanding Credit Scoring (1 day course)
    HO109 Foreclosure Basics (2 day course)
    HO110 Introduction to Homeownership Counseling (2 day course)
    HO211 Credit Counseling for Maximum Results (2 day course)
    HO220 Data Management and Tracking with CounselorMax (2 day course)
    HO240 Recognizing Predatory Practices - A Guide for Counselors (2 day course)
    HO252 Effective Group and Telephone Foreclosure Counseling Strategies (2 day course)
    HO253 FHA-Insured Loans: An Affordable Mortgage Option (2 day course)
    HO254 Automated Loan Modification for Foreclosure Solutions: An Intro to BestFit (1 day course)
    HO260 Counseling Borrowers to Purchase Real Estate Owned (REO) Properties (1 day course)
    HO307 Advanced Foreclosure: Case Study Practicum (2 day course)
    HO320 Developing and Implementing an Effective Foreclosure Program (2 day course)
    HO321 Developing Effective Loss Mitigation Negotiation and Sales Skills (2 day course)
    HO326 Advanced Residential Lending (2 day course)
    HO345 Foreclosure Intervention and Default Counseling Certification, Part I (5 day course)

Regional Multi-Course Trainings: NFMC Program funding has enabled NeighborWorks to host 15
regional Multi-Course Place-Based Trainings (PBTs) in collaboration with the corporation’s eight districts.
In total, 2,534 participants from more than 1,100 organizations received scholarships and attended
training through these PBTs. These events are designed to accommodate between 200 to 225 participants
each, and offer six to eight foreclosure-related courses.

Place-Based Trainings in Partnership with Intermediaries and HFAs: NFMC Program funding also
enabled NeighborWorks to sponsor 59 additional PBTs that were hosted by HUD-Approved Housing
Counseling Intermediaries and/or State Housing Finance Agencies. A total of 1,818 practitioners received
scholarships and attended training at these PBTs.

The table below presents the training opportunities and number of scholarships awarded in calendar year
2008.

  Table 3.1: NFMC Program Calendar Year 2008 Scholarships 
                                                                                                  Scholarships
NeighborWorks Training Opportunity                        Date                  Location
                                                                                                   Awarded
   NeighborWorks Training Institute               February 25-29, 2008        Atlanta, GA              118
   NeighborWorks Training Institute                  May 5-9, 2008           Cincinnati, OH            128
   NeighborWorks Training Institute                August 18-22, 2008         Chicago, IL              138
   NeighborWorks Training Institute               December 8-12, 2008        Washington, DC            192
             Regional PBT                         February 11-15, 2008       Sacramento, CA            144
             Regional PBT                          March 10-14, 2008          Providence, RI           150


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               Regional PBT                        April 14-18, 2008     Philadelphia, PA        217
               Regional PBT                         May 19-23 2008        St. Louis, MO          207
               Regional PBT                        June 23-27, 2008        Denver, CO            193
               Regional PBT                         July 14-18, 2008       Orlando, FL           195
               Regional PBT                     July 28-August 1, 2008    Burbank, CA            194
               Regional PBT                      September 8-12, 2008     Memphis, TN            165
               Regional PBT                     November 11-17, 2008       Phoenix, AZ           159
                                                                          Richmond, VA;
   Virginia Housing Development Authority            March 2008           Herndon, VA;            88
                                                                           Norfolk, VA
  New Jersey Housing and Mortgage Finance
                                                     March 2008             Trenton, NJ           26
                     Agency
         Mississippi Home Corporation                 May 2008             Jackson, MS            52
 State of New York Housing Finance Agency             June 2008           New York, NY            38
       Louisiana Housing Finance Agency               June 2008          Baton Rouge, LA          35
Wisconsin Housing and Economic Development
                                                      June 2008            Madison, WI            9
                    Authority
       California Housing Finance Agency              June 2008             Fresno, CA            40
            Nevada Housing Division                   June 2008            Las Vegas, NV          20
         Ohio Housing Finance Agency                  June 2008             Akron, OH             33
     Florida Housing Finance Corporation              June 2008           Jacksonville, FL        16
    Pennsylvania Housing Finance Agency               June 2008           Harrisburg, PA          52
Washington State Housing Finance Commission           June 2008             Seattle, WA           39
   Nebraska Investment Finance Authority              June 2008             Lincoln, NE           26
   Illinois Housing Development Authority             July 2008            Springfield, IL        17
             Iowa Finance Authority                   July 2008           Des Moines, IA          12
                 HomeFree-USA                         July 2008           Hyattsville, MD         30
   North Carolina Housing Finance Agency              July 2008             Raleigh, NC           33
  New Mexico Mortgage Finance Authority             August 2008          Albuquerque, NM          39
  Colorado Housing and Finance Authority           September 2008           Denver, CO            14
             National Urban League                 September 2008          Memphis, TN            38
  Mississippi Homebuyer Education Center
                                                   September 2008          Jackson, MS            31
                    Initiative
  Oregon Housing and Community Services            September 2008          Eugene, OR             41
  Georgia Department of Community Affairs          September 2008         Savannah, GA            44
                    SEEDCO                         September 2008        Birmingham, AL           25
             Catholic Charities USA                September 2008        New Orleans, LA          26
      Minnesota Housing Finance Agency             September 2008          St. Paul, MN           26
                    CHAPA                           October 2008           Boston, MA             24
                 Mission of Peace                   October 2008            Detroit, MI           29
  Arkansas Development Finance Authority            October 2008          Little Rock, AR         26
       Delaware State Housing Authority             October 2008            Dover, DE             22
Texas Dept of Housing and Community Affairs         October 2008         San Antonio, TX          24
Maryland Dept of Housing and Community Dev          October 2008         Crownsville, MD          27
      Alabama Housing Finance Authority            November 2008         Montgomery, AL           30
 Tennessee Housing Development Authority           November 2008          Nashville, TN           36

            26 | P a g e      National Foreclosure Mitigation Counseling Program Congressional Update
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   The table below presents the training opportunities and number of scholarships awarded in calendar year
   2009 (entries in italics are for events that occurred after August 18, 2009):

     Table 3.2: NFMC Program Calendar Year 2009 Scholarships 
                                                                                                 Scholarships
   NeighborWorks Training Opportunity                       Date                 Location
                                                                                                  Awarded
      NeighborWorks Training Institute               February 16-20, 2009     Atlanta, GA             162
      NeighborWorks Training Institute                  May 4-8, 2009         Phoenix, AZ             147
      NeighborWorks Training Institute                August 17-21, 2009      Chicago, IL             170
      NeighborWorks Training Institute               December 7-11, 2009     Washington, DC      Estimated 300
                Regional PBT                         January 26-30, 2009        Miami, FL             154
                Regional PBT                           March 2-6, 2009       Los Angeles, CA          179
                Regional PBT                        March 30-April 3, 2009    Cleveland, OH           165
                Regional PBT                          April 20-24, 2009        Hartford, CT           165
                Regional PBT                           May 18-22, 2009          Dallas, TX            129
                Regional PBT                           June 15-19, 2009       St. Louis, MO           118
                Regional PBT                        September 21-25, 2009     San Diego, CA           203
                Regional PBT                        November 16-20, 2009      Memphis, TN        Estimated 200
  New Jersey Housing and Mortgage Finance
                                                        January 2009            Trenton, NJ           34
                    Agency
          Nevada Housing Division                        January 2009         Las Vegas, NV           34
              Homefree - U S A                           January 2009         Hyattsville, MD         18
        Ohio Housing Finance Agency                     February 2009          Toledo, OH             29
Wisconsin Housing and Economic Development
                                                        February 2009         Eau Claire, WI          18
                  Authority
         Acorn Housing Corporation                      February 2009           Chicago, IL           16
    Maryland Department of Housing and
                                                         March 2009          Crownsville, MD          32
          Community Development
       Kentucky Housing Corporation                      March 2009            Louisville, KY         22
           Catholic Charities USA                        March 2009              Austin, TX           39
Washington State Housing Finance Commission              March 2009             Seattle, WA           19
             Minnesota Housing                           March 2009             St. Paul, MN          45
     California Housing Finance Agency                   March 2009           Sacramento, CA          38
  Homeownership Preservation Foundation                  April 2009             St. Paul, MN          17
 National Association of Real Estate Brokers-                                                         37
                                                          April 2009           Oakland, CA
      National Investment Division, Inc.
           Iowa Finance Authority                         April 2009          Des Moines, IA          28
        Mississippi Home Corporation                      May 2009              Jackson, MS           38
 National Community Reinvestment Coalition                May 2009            Washington, DC          40
  Virginia Housing Development Authority                  May 2009            Richmond, VA            20
  Georgia Department of Community Affairs                 June 2009             Macon, GA             42
           National Urban League                          June 2009           Cincinnati, OH          24
    Pennsylvania Housing Finance Agency                   July 2009          Philadelphia, PA         40
  New Mexico Mortgage Finance Authority                   July 2009          Albuquerque, NM          42
  Colorado Housing and Finance Authority                  July 2009             Denver, CO            21
Texas Dept of Housing and Community Affairs               July 2009            Houston, TX            10

            27 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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 North Carolina Housing Finance Agency                   July 2009              Raleigh, NC               47
National Foundation for Credit Counseling             September 2009           Washington, DC             90


 E-Learning Courses

 Since March 2008, 3,692 certificates have been earned for two online courses created with NFMC
 Program training funds. The first, Foreclosure Basics, was made available in May 2008. It provides
 counselors new to foreclosure intervention with general information and the flexibility to take the course
 at their convenience. Enrollees have 60 days to complete the course. It is available free of charge to
 employees of NeighborWorks organizations, HUD-Approved Housing Counseling Intermediaries and
 their affiliates and branches, State Housing Finance Agencies and their affiliates, HUD-Approved
 housing counseling agencies, states and municipalities, and select nonprofits. Course participants must
 successfully complete an exam at the end of the course to receive a certificate of completion. As of
 August 18, 2009, 3,275 certificates have been earned in this course.

 NeighborWorks has also created a second online course, Understanding and Applying Foreclosure
 Intervention and Loss Mitigation Tools, with NFMC Program funding. The course, launched in May 2009,
 specifically focuses on loss mitigation tools utilized in today’s foreclosure environment. Counselors learn
 to identify the most critical financial factors in foreclosure cases, analyze brief case scenarios, and then
 choose the loss mitigation tool that best addresses a homeowner’s mortgage problems. Additional
 resources on the most recent foreclosure initiatives created to assist homeowners are also provided. It is
 also available free of charge for eligible practitioners. As of August 18, 2009, 417 individuals have earned
 certifications for this new online course.


 Evaluating NFMC Program Training Activities

 As part of NeighborWorks America’s standard business practices, the Training Division closely monitors
 the soundness of the training it provides to community development practitioners at NTIs and PBTs. A
 multi-tiered evaluation protocol is used to assess the effectiveness of its training.

 Post-Course Exam: Most NFMC Program-related courses require participants to pass an on-line exam,
 which measures the degree to which they learned the course content. These tests are rigorous to ensure
 participants capture the key elements required within each curriculum – students have homework to
 complete and lessons to study before taking the exams at the end of the course. Successful completion of
 a post-course exam or content proficiency is required before participants can enroll in advanced-level
 courses.

 Advanced-Level Course Pre-Requisite Exam: The advanced foreclosure certification course requires
 participants to take an on-line pre-requisite exam, which measures their level of expertise in foreclosure
 mitigation. This exam ensures that only the most experienced participants are enrolled in this course and
 that the facilitators can maximize the learning opportunities.

 Course Evaluation Forms: Evaluations are administered to all NTI and PBT participants at the end of the
 final day of training. The evaluation forms ask participants to assess the effectiveness of the training in
 achieving the objectives of the course, the effectiveness of the trainers, and the degree to which the
 knowledge they acquired from the course will have an impact on their work.




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Overall, 96% of counselors who have taken courses funded through the NFMC Program agreed that after
taking the course, they were better prepared to assist their organization deliver foreclosure prevention
services.

Participant Feedback: Participants also provide written comments and other feedback after the
completion of training. Examples include:

        “I learned about streamlining workflow, maintaining boundaries, managing stress, negotiating,
        and the servicer/investor structure.”
        “I learned a better structure to inform clients what to bring to our sessions and how to handle
        intake more effectively.”
        “I learned to understand the servicers’ perspective so I can be more prepared to negotiate.”
        “A clear understanding of the national standards and the whole picture on foreclosure outside of
        the needs in our area.”
        “How to empower the borrower verses enabling the borrower.”
        “I learned various mitigation techniques and strategies from other counselors in the course.”
        “The most useful thing I learned was session management skills.”




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Counseling Efforts

As of August 18, 2009, the National Foreclosure Mitigation Counseling (NFMC) Program has enabled
HUD-Approved Housing Counseling Intermediaries, State Housing Finance Agencies, and
NeighborWorks organizations to provide 720,488 units of foreclosure mitigation counseling to 633,294
homeowners nationwide. The data in this section covers NFMC Program production from March 1, 2008,
the official start date of the program, through August 18, 2009.

In this timeframe, the program divided counseling services into three categories of specific activities,
Level One, Level Two, and Level Three counseling. The program will remove Level Three counseling
with Round 3.

Of the total units of counseling provided through August 18, 2009, Level One counseling sessions remain
the largest counseling activity, with 64% of the total units. Levels Two and Three comprised the
remaining 36% of units. The program is seeing Level One units delivered in excess of its goal, most likely
due to Grantees reporting a client at this level of counseling early, then reporting them as a Level Two
client once additional counseling efforts take place.

  Figure 4.1: Percentage of Counseling Units by Level 

            70
            60                                                                       Percentage of
            50                                                                       Units Delivered
            40
            30          64%      58%                                                 Percentage of
                                                         36%   42%                   Overall Goal
            20
            10
             0
                        Level One               Levels Two & Three
    Source: NFMC Program Reported Data



Geographic Information

When looking at states with the highest number of units of counseling provided within the NFMC
Program, California continues to rank highest – 17% of all units of counseling have occurred in this state.
Eight percent (8%) were delivered in Florida, 7% were delivered in Ohio, 5% were delivered in Illinois
and six states each saw 4% of overall production. Only Illinois was not in the top five states at the time of
the June report. A full state listing is available in Appendix C.




          30 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
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    Table 4.1: Top 10 States by Percentage of NFMC Program Clients and Corresponding Percentage of Nation’s 
      Delinquencies and Foreclosures (Ranked by Percentage of NFMC Program Clients) 
                                                                                      Percent of         Percent of
                                           Percent of           Number of
          State or Territory                                                           National           National
                                          NFMC Clients         NFMC Clients
                                                                                     Delinquencies      Foreclosures
    California                                  17%                 122,003                14%              17%
    Florida                                     8%                  56,587                 10%              22%
    Ohio                                         7%                  48,413                 4%               3%
    Illinois                                     5%                 36,272                  4%               4%
    Maryland                                     4%                 31,951                  2%               2%
    Michigan                                     4%                  30,645                 4%               3%
    Georgia                                     4%                  29,215                  5%               3%
    Pennsylvania                                 4%                  26,247                 3%               2%
    Minnesota                                    4%                  25,310                 2%               2%
    North Carolina                               4%                 25,202                 3%                1%
      Sources: MBA National Delinquency Survey, Second Quarter 2009, and NFMC Program Reported Data


Looking at national data from the Mortgage Bankers Association’s National Delinquency Survey from
Second Quarter 2009, California has the highest percentage of the nation’s delinquencies (14%) (defined
as at least 30 days past due), followed by Florida with 10%. Texas has 7% of the nation’s delinquent
mortgages, Georgia has 5%, and four states each have 4%. In the 10 states with the highest percentages of
national delinquencies, the NFMC Program has either the same percentage of clients in six of those states
or a higher percentage. For example, California has 14% of the nation’s delinquencies, and also has 17% of
all NFMC Program clients. When looking at NFMC Program penetration in the states with the highest
foreclosure rates, the program is supplying less counseling to Florida, but appears to be adequately
providing foreclosure counseling in all other states. Many of Florida’s foreclosures are investment
properties, and counseling on these properties is not permissible under the NFMC Program. Seven
percent (7%) of the program’s clients are in Ohio, which only has 3% of the nation’s foreclosures.

    Table 4.2: Top 10 States by Percentage of National Delinquencies and Foreclosures and Corresponding 
      Percentage of NFMC Program Clients (Ranked by Percent of National Delinquencies) 
                                                                                      Percent of         Percent of
                                           Percent of           Number of
          State or Territory                                                           National           National
                                          NFMC Clients         NFMC Clients
                                                                                     Delinquencies      Foreclosures
    California                                  17%                 122,003                14%              17%
    Florida                                     8%                  56,587                 10%              22%
    Texas                                        3%                  24,334                 7%               3%
    Georgia                                     4%                  29,215                  5%               3%
    Michigan                                     4%                  30,645                 4%               3%
    New York                                     3%                 21,059                 4%                4%
    Illinois                                     5%                 36,272                  4%               4%
    Ohio                                         7%                  48,413                 4%               3%
    Pennsylvania                                 4%                  26,247                 3%               2%
    North Carolina                               3%                 25,202                 3%                1%
      Sources: MBA National Delinquency Survey, Second Quarter 2009, and NFMC Program Reported Data


NeighborWorks, as administrator of the NFMC Program, was required by the legislation to concentrate
awards in targeted areas of greatest need. In Round 2, this was 184 Metropolitan Statistical Areas (MSAs)
and 29 rural areas of states, and 90% of units were awarded to these areas. As of August 18, 2009, the
            31 | P a g e          National Foreclosure Mitigation Counseling Program Congressional Update
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                                                                                                  November 16, 2009
NFMC Program has delivered 586,537 units of counseling, or 81% of the total units, to areas of greatest
need.

Of the total 720,488 units of counseling delivered through the NFMC Program, 662,600 units have been
delivered to MSAs and 57,888 units have been delivered to rural areas of states. Tables 4.3 and 4.4 below
show the 15 MSAs of greatest need with the highest number of units of counseling delivered and the 10
rural areas of states of greatest need by delivered units. (See Appendix C for full listings of MSAs and
rural areas of states and their counseling units delivered.)

Table 4.3: NFMC Program Units Delivered in Top 15 MSAs 
                                                                           Counseling
                       Metropolitan Statistical Area                         Units
                                                                           Delivered
      Chicago-Naperville-Joliet, IL-IN-WI                                     33,148
      Los Angeles-Long Beach-Santa Ana, CA                                    30,688
      Washington-Arlington-Alexandria, DC-VA-MD-WV                            30,264
      New York-Northern New Jersey-Long Island, NY-NJ-PA                      24,277
      Atlanta-Sandy Springs-Marietta, GA                                      21,126
      Riverside-San Bernardino-Ontario, CA                                    20,616
      Miami-Fort Lauderdale-Pompano Beach, FL                                 20,281
      Minneapolis-St. Paul-Bloomington, MN-WI                                 18,722
      Detroit-Warren-Livonia, MI                                              18,274
      Phoenix-Mesa-Scottsdale, AZ                                             17,175
      Philadelphia-Camden-Wilmington, PA-NJ-DE-MD                             16,731
      Cleveland-Elyria-Mentor, OH                                             15,028
      San Francisco-Oakland-Fremont, CA                                       14,257
      San Diego-Carlsbad-San Marcos, CA                                       13,583
      Boston-Cambridge-Quincy, MA-NH                                          10,522
    Source: NFMC Program Reported Data


  Table 4.4: NFMC Program Units Delivered in Top 10 Rural Areas of States of Greatest Need  
                                  Counseling Units
               State
                                     Delivered
      North Carolina                     5,412
      Minnesota                          4,566
      Ohio                               4,325
      Pennsylvania                       3,106
      South Carolina                     2,934
      Georgia                            2,720
      Michigan                           2,565
      Mississippi                        2,368
      Iowa                               1,890
      Tennessee                          1,573
    Source: NFMC Program Reported Data




          32 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
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Client Information

    Gender and Household Type

Women continue to represent more than half (52%) of all reported NFMC Program clients. Of these, 47%
identified their household type as either single adult or female-headed single parent household. These
females receive NFMC Program services at more than twice the rate of male clients who identified their
household type as either single adult or male-headed single parent household.

Overall, the largest percentage of clients (37%) reported that they were married with dependents.
   
  Table 4.5: Household Type 

                          Household Type                          Percent

        Married with Dependents                                    37%
        Single Adult                                               19%
        Married without Dependents                                 16%
        Female-Headed Single Parent Household                      13%
        Male-Headed Single Parent Household                         4%
        Two or More Unrelated Adults                                3%
        Other                                                       8%
        Source: NFMC Program Reported Data


    Race and Ethnicity

Throughout the course of the NFMC Program, the majority of clients (53%) have been minority
homeowners (defined as African American, Hispanic, American Indian/Alaskan Native, Asian, Pacific
Islander, and clients listing two or more ethnic backgrounds), while minorities make up 27% of
homeowners in the country. Overall, Whites represent 41% of all NFMC Program clients, African
Americans account for 27%, Hispanics represent 21%, Asians account for 3%, 1% of clients are other
minorities, 1% reported having two or more ethnicities, and 6% report being other races or did not state
their race. Figure 4.2 represents the racial breakdown of NFMC Program clients, and Figure 4.3 compares
this breakdown to the percentage of the nation’s homeowners that are comprised of each group.

  Figure 4.2: Race and Ethnicity of NFMC Program Clients 

                     1% 1%     6%
                                                            White
                3%                                          African American
                                                            Hispanic
                                                            Asian
                                                            Two or More
                                         41%                Other Minority
                21%                                         Other/Did not State



                             27%




    Source: NFMC Program Reported Data

          33 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
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  Figure 4.3: Percentage of All U.S. Homeowners by Race and Ethnicity Compared to that of NFMC Program 
  Clients

      90%           79%
      80%
      70%
                                                                                           All Homeowners
      60%
      50%               41%
      40%                                                                                  NFMC Clients
                                      27%
      30%                                                         21%
      20%                        9%                          8%                8%
      10%                                        4%    3%                1%
       0%
                White           Black           Asian       Hispanic Other/Did
                                                                     not State

    Sources: Claritas 2009 and NFMC Program Reported Data


Comparing NFMC Program data to data on all U.S. homeowners, we see that the program is serving
minorities well, as they are seeking counseling at much higher rates than their overall homeownership
rates. Twenty-seven percent (27%) of NFMC Program clients are African American, while they only
make up 9% of all homeowners, and 21% of NFMC Program clients are Hispanic, while they are only 8%
of the nation’s homeowners. Most U.S. homeowners (79%) are white, and these homeowners are also the
largest racial group seeking NFMC Program counseling – 41% of clients are white.

Data on loan status or delinquency status by homeowners’ race are not available. An estimate of
foreclosures by race would begin by looking at subprime loans, which are far more likely than other loans
to go into foreclosure. Home Mortgage Disclosure Act (HMDA) data from the last year in which
subprime lending was prevalent—2006—show that 56% of all subprime loans went to white borrowers,
20% to blacks, 20% to Hispanics and 4% to Asians. However, as of 2nd quarter 2009, subprime loans
comprised only one-third of all foreclosure starts, with the majority of foreclosure starts coming on prime
loans. Given that whites were more likely to get prime loans, which accounted for more than half of all
foreclosure starts in the most recent data, a higher portion of foreclosures are affecting white
homeowners than this subprime distribution would suggest. Figure 4.4 presents the HMDA data by race
compared to NFMC Program clients with mortgages with high interest rates by race.




          34 | P a g e           National Foreclosure Mitigation Counseling Program Congressional Update
                                                Program administered by NeighborWorks® America
                                                                                         November 16, 2009
Figure 4.4: Percent of Loans with Interest Rates at or Above 8% Originated in 2006 by Race Compared to NFMC 
Program Clients

      100
       90
       80                                                                                     All Homeowners
       70      56%
       60
                                                                                              NFMC Clients
       50                           36%
                      37%
       40
       30                     20%                              20% 18%
       20
                                               4% 2%
       10
        0
               White           Black           Asian          Hispanic

    Sources: Home Mortgage Disclosure Act 2006 Data and NFMC Program Reported Data
    NOTE: HMDA data classify homeowners by one of the four ethnicities listed in the chart. NFMC Program data also
    include “other” ethnicities, therefore NFMC data in this chart do not equal 100%.


Among states and territories with the largest percentage of African Americans homeowners, the NFMC
Program is effectively reaching this group. In Washington, DC, which has the largest percentage of
African American homeowners in the nation (47%), 76% of NFMC Program clients were African
American. In the top five states with the greatest percentage of African American homeowners, more
than half of NFMC Program clients have been African American.

Table 4.6: Top 5 States with High Percentage of African American Homeowners Compared to NFMC Program 
Clients 
                                                  Percent of               Percent of NFMC
                                               Homeowners that              Clients that are
                     State
                                                 are African               African American
                                                  American
   District of Columbia                                47%                         76%
   Mississippi                                         28%                         64%
   Louisiana                                           22%                         52%
   Georgia                                             22%                         60%
   Maryland                                            22%                         56%
    Source: NFMC Program Reported Data


The same can be said of Hispanic clients. Within the five states with the highest percentage of Hispanic
homeowners, the NFMC Program is effectively reaching this group. In New Mexico, where 38% of
homeowners are Hispanic, 50% of the NFMC Program clients are Hispanic. This is also the case in Texas,
which ranks second in the nation with 25% of its homeowners being Hispanic. Forty-one percent (41%)
of NFMC Program clients in Texas are Hispanic.




            35 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                                Program administered by NeighborWorks® America
                                                                                                  November 16, 2009
Table 4.7: Top 5 States with High Percentage of Hispanic Homeowners Compared to NFMC Program Clients
                                             Percent of           Percent of NFMC
                  State                   Homeowners that          Clients that are
                                            are Hispanic              Hispanic
   New Mexico                                    38%                     50%
   Texas                                         25%                     41%
   California                                    21%                     42%
   Arizona                                       17%                     41%
   Nevada                                        15%                     29%
    Source: NFMC Program Reported Data


When looking at the NFMC Program’s penetration in states with high percentages of Asian homeowners,
the program penetration approximates the representation in the population in 2 of the five states, and is
close to approximating the representation in another (Hawaii, which has the highest percentage of Asian
homeowners). In California, 11% of homeowners are Asian, and 9% of NFMC Program clients are Asian.
In New Jersey, 5% of homeowners are Asian, but only 3% of NFMC Program clients are in this group.

Table 4.8: Top 5 States with High Percentage of Asian Homeowners Compared to NFMC Program Clients
                                            Percent of            Percent of NFMC
                  State                   Homeowners that          Clients that are
                                             are Asian                 Asian
   Hawaii                                        54%                     43%
   California                                    11%                     9%
   Nevada                                         6%                     10%
   New Jersey                                     5%                     3%
   Washington                                     5%                      7%
    Source: NFMC Program Reported Data


Counselors providing services through the NFMC Program are able to assist clients in a total of 38
languages. The predominant languages spoken by counselors are English and Spanish, but counseling
services are also available in French, Tagalog, Korean, Slavic languages, Portuguese, African languages,
Chinese and Vietnamese, among others.

    Age

Client age has remained consistent throughout the course of the program, with clients being an average
age of 46. Most NFMC Program clients are between the ages of 35 and 54 (62%), however 22% of clients
are over 55 (6% are over the age of 65).




          36 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                           Program administered by NeighborWorks® America
                                                                                       November 16, 2009
  Figure 4.5: Age 


                               6%                             18-34
                                       16%
                      16%                                     35-44
                                                              45-54
                                                              55-64
                                             31%
                                                              65+
                        31%




    Source: NFMC Program Reported Data
    Note: Entries under 17 years of age excluded

When comparing age with household type, 39% of clients who report having dependents or being the
head of their household are between the ages of 35 and 44. Overall, 88% of these clients report being
under the age of 55. Thirty-six percent (36%) of clients who report either being single adults or having no
dependents are above the age of 55 (12% are above 65).

    Primary Reason for Default

The economy and job market have been the driving forces of homeowners seeking assistance through the
NFMC Program. As the program had progressed, a higher percentage of clients have reported facing
foreclosure due to a reduction in or loss of income, consistent with the increasing unemployment rate. As
of August 18, 2009, 54% of clients report this to be the case, the highest percentage yet in the program. In
the June Congressional update, this percentage stood at 49%; in February 2009 it was 45%; and in October
2008 it was 41%. In the aggregate, only 5% of clients report the primary reason they are in counseling is
due to an increase in their loan payment.
   
  Table 4.9: Primary Reason for Default 
                                                                      November 2009
                        Primary Reason for Default
                                                                         Percent
         Reduction in income                                               34%
         Loss of income                                                    20%
         Medical issues                                                    7%
         Poor budget management skills                                     6%
         Increase in loan payment                                           5%
         Increase in expense                                                5%
         Divorce/separation                                                 4%
         Death of family member                                             2%
         Business venture failed                                            1%
         Other                                                             17%
    Source: NFMC Program Reported Data




           37 | P a g e             National Foreclosure Mitigation Counseling Program Congressional Update
                                                   Program administered by NeighborWorks® America
                                                                                        November 16, 2009
  Figure 4.6: Primary Reason for Default Over Course of NFMC Program 

  60
                                                                                                    Reduction in/Loss of
  50                                                                                                Income

  40                                                                                                Medical Issues

  30
                                                                                                    Increase in Loan Payment

  20
                                                                                                    Poor Budget Management
  10

   0
       October           February                 June                   November
        2008               2009                   2009                     2009

    Source: NFMC Program Reported Data


Among the 346,367 clients reporting reduction in or loss of income as the primary reason for default, a
state-by-state analysis (which includes territories) ranks Idaho, Oregon, Puerto Rico, Arizona and Florida
as having the highest percentage of NFMC Program clients reporting this reason. (Table 4.10) The
ranking of these states has changed slightly since the last Congressional update in June, but the same five
states remain atop the list. Two of these states have unemployment rates above 11%. A full listing is
available in Appendix C.

  Table 4.10: Top 5 States with NFMC Program Clients Listing Reduction in or Loss of Income as Primary Reason 
  for Default 
                                                                                              Unemployment
                     State or Territory                    Percent            Clients
                                                                                                  Rate
        Idaho                                                70%              1,023                   9%
        Oregon                                               68%               3,014                 12%
        Puerto Rico                                          68%              2,101                  16%
        Arizona                                              65%              12,758                  9%
        Florida                                              62%              30,780                 11%
    Sources: Bureau of Labor Statistics: Local Area Unemployment Statistics, September 2009 and NFMC Program Reported Data



Loan Information

    Loan Type

The economy and job market are also forcing more homeowners with fixed-rate mortgages to face
foreclosure. Of the 633,294 clients who received counseling services from NFMC Program Grantees, 56%
reported holding fixed rate mortgages, up from 52% at the time of the last report. Even more startling is
that 43% of clients report holding fixed-rate mortgages with interest rates below 8%, the most desirable
mortgage product on the market. While only 18% of mortgages nationwide are adjustable rate mortgages
(ARMs), 33% of NFMC Program clients reported holding them, and 15% of clients report holding an
ARM with an interest rate above 8%. Another 2% reported being in counseling for assistance with a


          38 | P a g e           National Foreclosure Mitigation Counseling Program Congressional Update
                                                  Program administered by NeighborWorks® America
                                                                                                    November 16, 2009
mortgage modified within the previous six months. This option is new for Round 2 reporting, and thus
the percentage is expected to rise with subsequent reports.

  Figure 4.7: Loan Type 

                     2%
                                                              Fixed Under 8%
                9%
                                                              Fixed 8% or Greater
         15%                                                  ARM Under 8%
                                43%
                                                              ARM 8% or Greater
                                                              Other/Did Not State
             18%                                              Recently Modified
                     13%



    Source: NFMC Program Reported Data


When comparing primary reason for default by loan type, the data show that 62% of those holding fixed
rate mortgages reported they were defaulting on their mortgage due to a reduction in or loss of income,
compared to 30% of those holding ARMs. Eleven percent (11%) of clients holding ARMs report an
increase in loan payment as the reason they are in default.

The breakdown of loan type of NFMC Program clients compared to all loans is presented in Figure 4.8,
which shows that NFMC Program clients holding all loan types other than prime fixed are seeking
counseling at a much higher rate than these loans exist in the market (the program uses an interest rate of
8% as a proxy to indicate subprime loans). Only 6% of all U.S. mortgages are subprime fixed loans, but
13% of NFMC Program clients hold these mortgages.


  Figure 4.8: Loan Type of NFMC Program Clients Compared to Loan Type of All Homeowners 


                                                                                      Prime Fixed
                                                                                      Subprime Fixed
     NFMC Clients               43%               13%    18%      15%    11%
                                                                                      Prime ARM
                                                                                      Subprime ARM
                                                                                      Other/DNS/Rec Mod


  All Homeowners                      64%                 6% 13% 5% 13%




                     0%        20%          40%         60%      80%       100%

    Sources: Mortgage Bankers Association National Delinquency Survey, Second Quarter 2009, and NFMC Program Reported
        Data


A state-by-state analysis reveals that more than half of NFMC Program clients in Mississippi (54%) hold
loans with interest rates currently at or above 8%. This is nearly double the NFMC Program average
(28%). Tennessee, Missouri, Pennsylvania and Iowa round out the top five for states with the highest
          39 | P a g e           National Foreclosure Mitigation Counseling Program Congressional Update
                                                   Program administered by NeighborWorks® America
                                                                                                  November 16, 2009
rates of NFMC Program clients holding mortgages with interest rates at or above 8% – all above 40%. All
of these states except Iowa were also the top five states listed in the June update. A full listing is available
in Appendix C.

  Table 4.11: Top 5 States with NFMC Program Clients Holding Loans with Interest Rates At or Above 8% 

                           State                        Percent         Clients

        Mississippi                                       54%            2,960
        Tennessee                                         42%            4,647
        Missouri                                          42%            5,112
        Pennsylvania                                      41%            9,582
        Iowa                                              40%            1,800
    Source: NFMC Program Reported Data


A deeper state-by-state analysis into loans with high interest rates revealed that Missouri continues to
have the highest percentage of NFMC Program clients holding ARMs currently at or above 8% (23%).
They have been the highest state in this category throughout the course of the program, though the
percentage is declining, from a high of 35% to the current mark of 23%. Rounding out the top five,
Tennessee, Connecticut, Mississippi and Rhode Island are the states with the highest percentages of
NFMC Program clients holding these mortgages, all with over 20% of clients. A full listing is available in
Appendix C.

  Table 4.12: Top 5 States with NFMC Program Clients Holding ARMs with Interest Rates At or Above 8% 

                            State                        Percent        Clients

        Missouri                                           23%           2,864
        Tennessee                                          21%           2,351
        Connecticut                                        21%           1,431
        Mississippi                                        21%           1,144
        Rhode Island                                       21%            757
    Source: NFMC Program Reported Data


For the first time in the program, all ethnicities were more likely to hold fixed rate mortgages than ARMs.
African American NFMC Program clients were nearly twice as likely to hold fixed rate mortgages (56%)
than ARMs (33%); Hispanic clients were slightly more likely to hold fixed rate mortgages (48%) than
ARMs (41%); Asian clients were nearly as likely to hold ARMs (44%) as fixed rate mortgages (46%); and
White clients were more than twice as likely to hold fixed rate mortgages (63%) than ARMs (27%).

    Loan Status at Intake

The majority of NFMC Program clients continue to be less than 60 days late on their mortgage when they
seek assistance. Fifty-one percent (51%) of clients reported through August 18, 2009 were either current or
less than 60 days late. The percentage of clients who remain over 120 days delinquent continues to remain
constant, with 22% falling into this category.

Servicers continue to triage homeowners based on their delinquency status, and, according to feedback
received from counselors in the program, some servicers have been advising clients to become delinquent
to receive a more timely response on a modification request. Even within the parameters of the Making
Home Affordable program, many clients who are current when they contact their servicer are not able to

          40 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                             Program administered by NeighborWorks® America
                                                                                           November 16, 2009
obtain assistance. NFMC Program counselors work with these homeowners to communicate with their
servicer, review their income and expenses, and create crisis and long-term budgets for them. Once a
client receives a Making Home Affordable modification, counselors also work with the clients to lower their
back end debt to income ratios where possible.

    Table 4.13: Loan Status at Intake 

                        Loan Status                   Percent

        Current                                         33%
        30-60 Days Late                                 21%
        61-90 Days Late                                 16%
        91-120 Days Late                                 9%
        121+ Days Late                                  22%
      Source: NFMC Program Reported Data


As with the June report, Montana, South Dakota and the District of Columbia had the most NFMC
Program clients reporting being current on their mortgage – each with at least 50% of their clients not yet
delinquent. Alaska and West Virginia also were high on the list of clients that were current. All of these
except for Alaska were listed in the top five in the June report. A full state listing is available in Appendix
C.
 
    Table 4.14: Top 5 States with NFMC Program Clients Current on Mortgage

                    State or Territory               Percent       Number

        Montana                                        63%           1,371
        South Dakota                                   59%            868
        District of Columbia                           50%            942
        Alaska                                         47%            372
        Nevada                                         46%           5,207
      Source: NFMC Program Reported Data


Among states and territories with the highest percentage of clients reporting being over 120 days late on
their mortgages, Puerto Rico ranked highest with 39%, almost twice the NFMC Program average (22%).
Puerto Rico continues to also rank the highest among clients reporting reduction in or loss of income
(68%). Late mortgage payments may be a direct result of financial hardships or difficulties. The high
percentage of clients severely delinquent at intake could also be due to collection strategies not being as
aggressive in the territory. Iowa, Minnesota, Pennsylvania and Maine all report having high percentages
of NFMC Program clients over 120 days late on their mortgage, the same five states and territories that
were the highest at the time of the June report. A full state listing is available in Appendix C.
 




            41 | P a g e          National Foreclosure Mitigation Counseling Program Congressional Update
                                              Program administered by NeighborWorks® America
                                                                                           November 16, 2009
  Table 4.15: Top 5 States with NFMC Program Clients Over 120 Days Late on Mortgage

                   State or Territory                       Percent          Number

        Puerto Rico                                           39%               1,211
        Iowa                                                  32%               1,419
        Minnesota                                             29%               6,396
        Pennsylvania                                          28%               6,587
        Maine                                                 27%                464
    Source: NFMC Program Reported Data

    Housing Cost Burden

In addition to reported loan type, clients’ monthly payments on their mortgages’ principal, interest, taxes,
and insurance (PITI) was assessed at counseling intake. On average, the total reported monthly PITI was
$1,662, and the median was $1,385. Twenty-seven percent (27%) of clients paid more than $2,000 per
month in PITI (Figure 4.9). These figures have not changed substantially throughout the course of the
program.
   
  Figure 4.9: Percentage of NFMC Program Clients by Monthly PITI Payment Amount 

   30


   25


   20


   15

   10


    5
                7%            24%            25%           17%            27%
    0

              Less          $500 -        $1,000 -      $1,500 -        More
              than          $1,000         $1,500        $2,000          than
              $500                                                      $2,000

    Source: NFMC Program Reported Data
    Note: Extreme outliers removed from PITI. Total of .05% cases trimmed from highest and lowest values.


With 44% of NFMC Program clients reporting paying more than $1,500 toward their PITI, a deeper
analysis of mortgage affordability was conducted. The results of this analysis showed that 39% of NFMC
Program clients are paying more than half of their income toward housing costs. Twenty percent (20%)
are paying more than 75% of their income on housing costs.




           42 | P a g e           National Foreclosure Mitigation Counseling Program Congressional Update
                                                     Program administered by NeighborWorks® America
                                                                                                        November 16, 2009
     Figure 4.10: Percentage of NFMC Program Clients by Percentage of Income Paid to PITI 

      35

      30

      25

      20

      15

      10

       5
                   29%            18%           14%            19%            20%
       0
                 Less           30% -          40% -          50% -          More
                 than            40%            50%            75%           than
                 30%                                                         75%

       Source: NFMC Program Reported Data
       Note: Extreme outliers removed from PITI. Total of .05% cases trimmed from highest and lowest values.
  
These percentages have remained constant throughout the course of the program, even though the
percentage of clients reporting defaulting due to a reduction in or loss of income has increased
considerably. This could be due to homeowners having less income but remaining committed to paying
their mortgage. An analysis was conducted on those clients who reported facing foreclosure due to
reduction in or loss of income. Of those that reported facing foreclosure due to a reduction in income,
40% are paying more than 50% of their income to PITI, and of those that reported facing foreclosure due
to a loss of income, 49% are paying more than 50% of their income to PITI.

The Making Home Affordable modification program dictates that servicers should work with homeowners
seeking modifications to reduce their front end ratio to 31% of their income. In the NFMC Program, 71%
of clients pay more than 30% of their income to housing costs.

State-by-state analysis shows that the state of Washington had the highest percentage of NFMC Program
clients (38%) reporting paying more than 75% of their income to PITI, with New York, Hawaii, Wyoming
and Florida rounding out the top 5 states. California has moved out of the top five states in this regard,
but still has 25% of clients reporting paying more than 75% of their income to PITI. A full state listing can
be found in Appendix C.

     Table 4.16: Top 5 States with NFMC Program Clients Paying More Than 75% of Income to PITI

                      State or Territory                       Percent          Number

           Washington                                            38%             2,561
           New York                                              31%             5,413
           Hawaii                                                31%              260
           Wyoming                                               28%               78
           Florida                                               26%             12,531
       Source: NFMC Program Reported Data


Six states had the majority of their NFMC Program clients report paying less than 30% of their income on
housing costs but still facing foreclosure. Mississippi now ranks first in this category, with 71% of clients
              43 | P a g e           National Foreclosure Mitigation Counseling Program Congressional Update
                                                       Program administered by NeighborWorks® America
                                                                                                           November 16, 2009
reporting this to be the case. North Dakota, South Dakota, Oklahoma and West Virginia rounded out the
top five for clients with low PITI payments, the same five states that ranked highest in the June report.
The full state listing can be found in Appendix C.
   
  Table 4.17: Top 5 States with NFMC Program Clients Paying Less Than 30% of Income to PITI 

                  State or Territory                Percent       Number

      Mississippi                                     71%           3,836
      North Dakota                                    64%            188
      South Dakota                                    64%            894
      Oklahoma                                        62%           1,608
      West Virginia                                   53%            758
    Source: NFMC Program Reported Data

Sixty-six percent (66%) of NFMC Program clients report having household incomes less than 80% of their
Area Median Income (AMI), and 42% report having incomes less than 50% AMI. These statistics have
been consistent throughout the course of the program. South Carolina has the highest percentage of
NFMC Program clients reporting income lower than 80% AMI (90%), followed by the District of
Columbia, Mississippi, Maryland and Illinois. A full state listing is available in Appendix C.

  Table 4.18: Top 5 States with NFMC Program Clients with Income Less Than 80% AMI 

                    State or Territory              Percent       Number

      South Carolina                                  90%          12,146
      District of Columbia                            89%          1,676
      Mississippi                                     81%          4,469
      Maryland                                        79%          21,211
      Illinois                                        79%          25,866
    Source: NFMC Program Reported Data

When looking at clients reporting making less than 50% AMI, the District of Columbia still ranks highest
by states or territories, with 79% of their NFMC Program clients reporting incomes below 50% AMI.
South Carolina, Mississippi, Maryland and Illinois are also in the top five. A full listing is available in
Appendix C.

  Table 4.19: Top 5 States with NFMC Program Clients with Income Less Than 50% AMI 

                  State or Territory                Percent       Number

      District of Columbia                            79%          1,481
      South Carolina                                  77%          10,416
      Mississippi                                     63%          3,450
      Maryland                                        59%          15,786
      Illinois                                        58%          19,004
    Source: NFMC Program Reported Data


Among all clients with incomes less than 50% AMI, African Americans and whites accounted for the
largest ethnic groups at 35% each, and 21% were Hispanic. When the analysis is expanded, more whites
had incomes below 80% AMI than all other races (37%). African Americans accounted for 31% of clients
with incomes below 80% AMI, and Hispanics accounted for 21%.
          44 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
                                                                                         November 16, 2009
Table 4.20: NFMC Program Clients with Income Less Than 50% and 80% AMI by Ethnicity
                                                         ≤50%                     ≤80%
                                                         AMI                      AMI

                       Ethnicity                      Number          Percent    Number        Percent

      White                                              90,829            35%   157,262        37%
      Black/African American                             91,901            35%   130,893        31%
      Hispanic                                           54,484            21%   89,575         21%
      Asian                                              5,830             2%    10,073          2%
      Two or More                                         2,931             1%    5,097          1%
      Other Minority                                      1,781             1%    2,946          1%
      Other/Did Not Respond                              14,416             6%   24,290         6%
    Source: NFMC Program Reported Data



NFMC Program Service to Low-Income and Minority Zip Codes

NeighborWorks America is committed to ensuring the nation’s low-income and minority homeowners
and neighborhoods are served by the NFMC Program. The legislation for the second round of the NFMC
Program included language to ensure that at least 15% of the funding support the efforts of counseling
agencies that target low-income and minority homeowners or neighborhoods. In Round 2, 41% of the
appropriation was awarded to Grantees that committed to provide these services.

Throughout the course of the program, low-income and minority homeowners have been served at a
high level. As discussed earlier, a majority of clients (53%) are minorities, and further analysis shows how
substantial NeighborWorks’ commitment is to ensuring minorities, who have been disproportionately
affected by the nation’s foreclosure crisis, receive counseling through the NFMC Program.

According to Claritas 2008 data, 82.5 million people (or 27% of the U.S. population) live in zip codes
where the majority of residents are minorities. Of these, 14.8 million are homeowners, and 8.9 million are
minority homeowners. NeighborWorks conducted an analysis of NFMC Program penetration into these
zip codes. A total of 211,872 NFMC Program clients, or 33% of all clients, reside in one of them, and $50
million of counseling funds have been delivered to these zip codes. In aggregate, HUD-Approved
Housing Counseling Intermediaries have provided 34% of their services to clients in these zip codes,
State Housing Finance Agencies have provided 28% of their counseling services to these zip codes, and
NeighborWorks organizations have provided 43% of their overall counseling to clients in these zip codes.

  Table 4.21: Grantees and Service in Majority Minority Zip Codes       
                                                              Clients in
                                                                                                Dollar
           Grantee Type                  Total Clients       Minority Zip        Percent
                                                                                               Amount
                                                               Codes
Intermediaries                             457,760                155,292         34%        $36,060,250
State Housing Finance Agencies             129,555                 36,763         28%         $9,494,850
NeighborWorks Organizations                45,979                 19,817          43%        $4,651,250
                           Total:          633,294                211,872         33%        $50,206,350
Source: NFMC Program Reported Data




          45 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                              Program administered by NeighborWorks® America
                                                                                           November 16, 2009
When looking at nationwide delivery of services to minorities, 53% of all NFMC Program clients are
minorities. HUD-Approved Housing Counseling Intermediaries have provided 53% of their services to
minority clients, State Housing Finance Agencies have provided 49% of their counseling services to
minorities, and NeighborWorks organizations have provided 65% of their NFMC Program counseling
services to minority clients. This equates to $80.2 million of counseling being provided to minorities as of
August 18, 2009.

    Table 4.22: Grantees and Service to Minorities       
                                                              Minority                          Dollar
             Grantee Type                 Total Clients                         Percent
                                                              Clients                          Amount
Intermediaries                                457,760          242,418               53%      $56,913,500
State Housing Finance Agencies                129,555           63,574               49%      $16,124,000
NeighborWorks Organizations                   45,979           29,869                65%      $7,179,900
                           Total:             633,294          335,861               53%      $80,217,400
Source: NFMC Program Reported Data


The NFMC Program has also been providing services to low-income homeowners. According to Claritas
2008 data, 60.6 million people (or 20% of the U.S. population) live in zip codes with less than 80% of the
Area Median Income (AMI), and 10.6 million homeowners live in these zip codes. When looking at
NFMC Program penetration into these zip codes, 25% of program clients reside in them, and $38.4
million in counseling has been provided to these zip codes. HUD-Approved Housing Counseling
Intermediaries have provided 24% of their NFMC Program counseling to clients in these zip codes, State
Housing Finance Agencies have provided 26% of their counseling to these clients, and NeighborWorks
organizations have provided 35% of their counseling to clients in these zip codes.

    Table 4.23: Grantees and Service to Zip Codes with Income Less Than 80% AMI   
                                                            Clients in Low-
                                                                                                Dollar
             Grantee Type                 Total Clients       Income Zip        Percent
                                                                                               Amount
                                                                Codes
Intermediaries                               457,760            110,253              24%      $25,642,350
State Housing Finance Agencies               129,555             33,897              26%      $8,956,650
NeighborWorks Organizations                  45,979             16,243               35%      $3,884,250
                           Total:            633,294            160,393              25%      $38,483,250
Source: NFMC Program Reported Data


Overall in the NFMC Program, 66% of clients report having incomes less than 80% of their AMI, and $97
million has been utilized to counsel these clients. HUD-Approved Housing Counseling Intermediaries
have provided 66% of their services to clients who report making less than 80% AMI, State Housing
Finance Agencies have provided 65% of their counseling services to these clients, and NeighborWorks
organizations have provided 72% of their NFMC Program counseling services to clients who report
making less than 80% AMI.
 




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Table 4.24: Grantees and Service to Clients with Income Less Than 80% AMI     
                                                          Low-Income                            Dollar
           Grantee Type                Total Clients                             Percent
                                                            Clients                            Amount
Intermediaries                            457,760            303,659              66%         $68,867,900
State Housing Finance Agencies            129,555             83,563              65%         $20,346,450
NeighborWorks Organizations               45,979             32,914               72%         $7,982,300
                           Total:         633,294            420,136              66%         $97,196,650
Source: NFMC Program Reported Data


NeighborWorks conducted further analysis into low-income minority community (LIMC) zip
codes. LIMCs are defined as zip codes with a majority population being minority; 30% of minorities
being homeowners; and the median income of the zip code being less than 80% of the area median. These
1,284 LIMC zip codes account for 4% of all zip codes where NFMC Program activities were reported. As
of August 18, 2009, 16% of NFMC Program clients lived in low-income minority community (LIMC) zip
codes. Thus, homeowners are four times more likely to get NFMC Program counseling if they live in a
LIMC.


Counseling Outcomes

    Urban Institute Analysis of Outcomes

The NFMC Program asks Grantees to report an outcome, if known, when each client’s information is
reported to the NFMC Program Data Collection System (DCS). For clients where the outcome is
unknown when their file is reported to the DCS, Grantees are able to update all unknown outcomes in
aggregate during the next NFMC Program quarterly report. Because these outcomes are self-reported,
and do not reflect the long-term result of counseling, the NFMC Program has competitively awarded a
contract to the Urban Institute to research the impact of foreclosure counseling on the likelihood of
foreclosure. Their two previous interim reports have been shared with Congress in earlier NFMC
Program reports, and their third report, which contains the results of preliminary analyses that attempt to
measure the effects of the NFMC Program on counseled homeowners, is presented in the next section of
this report.

    Grantee Self-Reported Outcomes

The tables below represent an account of all outcomes reported by Grantees through August 18, 2009 at
client file upload as well as updated outcomes provided during the August 1, 2009 quarterly report. It is
important to note that these are self-reported data and should only be used to arrive at impressions of the
general trends. These data should not be used to draw conclusions of the effectiveness of the program.
Often, due to slow servicer response time and borrowers falling out of contact with the counseling
agencies, outcomes are not known by the counselor and are impossible to report; therefore, a high
percentage of unknown outcomes exists in the self-reported data.

In an effort to retrieve more concise outcome information, the NFMC Program revised its list of
reportable outcomes for Round 2. To best explain the data, two tables are presented below – Outcomes in
Round 1 and Outcomes to date in Round 2.

Among clients reported by Grantees in Round 1, only 2% had their mortgage foreclosed. Twenty percent
(20%) were able to stay in their home post-NFMC Program counseling by initiating a forbearance or
repayment plan with their servicers, modifying or refinancing their mortgages, or bringing their

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  mortgages current (see shaded rows in Table 4.25). According to Grantees, one third of clients (33%) were
  still in counseling when they were reported to the NFMC Program. With responses from servicers
  generally taking up to 90 days, and with the current economic climate resulting in the need for more
  long-term solutions, it is possible these clients will require counseling for a significant amount of time.

  Table 4.25: Round 1 Counseling Outcomes
                                                                                       Number of
                                Round 1 Outcomes                                                        Percentage
                                                                                        Clients
Currently receiving foreclosure prevention/budget counseling                             128,828            33%
Ending counseling after level 1 -- outcome unknown                                        48,543            12%
Initiated forbearance agreement/repayment plan                                           38,893             10%
Counseled and referred to another social service or emergency assistance agency           31,462             8%
Mortgage modified                                                                        26,908              7%
Brought mortgage current                                                                 12,995              3%
Withdrew from counseling                                                                 11,662              3%
Pre-foreclosure sale                                                                      10,905             3%
Counseled and referred for legal assistance                                                8,645             2%
Bankruptcy                                                                                7,895             2%
Mortgage foreclosed                                                                        6,550             2%
Entered debt management plan                                                               5,057             1%
Sold property/chose alternative housing solution                                           2,590             1%
Mortgage refinanced                                                                       1,886              0%
Executed a deed-in-lieu                                                                     573              0%
Obtained partial claim loan from FHA lender                                                 479              0%
Received second mortgage                                                                    188              0%
Other                                                                                    51,156             13%
                                                                            Total:       395,215           100%
      Source: NFMC Program Reported Data
      Note: N=395,215


  When looking at outcomes reported by Grantees to date in the second funding round, the most
  commonly reported outcome is that the client is in negotiation with the servicer. This is most likely due to
  the Making Home Affordable program and counselors and clients waiting for a response from servicers
  regarding their application, or waiting for a trial modification to become permanent. Only 1% of clients in
  Round 2 have had their mortgage foreclosed. Fourteen percent (14%) were able to stay in their home
  post-NFMC Program counseling by initiating a forbearance or repayment plan with their servicers,
  modifying or refinancing their mortgages, or bringing their mortgages current (see shaded rows in Table
  4.26). The entries that start with asterisks are new outcomes for Round 2.




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  Table 4.26: Round 2 Counseling Outcomes
                                                                                     Number of
                                       Outcomes                                                   Percentage
                                                                                      Clients
*Currently in negotiation with servicer; outcome unknown                               55,912         25%
Ending counseling after Level One -- outcome unknown                                   31,439         14%
*Counseled on debt management or referred to debt management agency                    18,354         8%
Initiated forbearance agreement/repayment plan                                         15,164         7%
*Mortgage modified with PITI less than or equal to 38% of gross monthly income
                                                                                       13,365          6%
with at least a 5 year fixed rate
Counseled and referred to another social service or emergency assistance agency        10,413          5%
Withdrew from counseling                                                                5,502          2%
*Referred homeowner to servicer with action plan and no further counseling
                                                                                        4,432          2%
activity; outcome unknown
Bankruptcy                                                                              4,195          2%
Counseled and referred for legal assistance                                             4,094          2%
*Brought mortgage current (without rescue funds)                                        2,713          1%
*Homeowner(s) sold property (not short sale)                                            2,140          1%
Mortgage foreclosed                                                                     1,881          1%
*Pre-foreclosure sale/short sale                                                        1,862          1%
*Mortgage modified with PITI greater than 38% of gross monthly income or
                                                                                        1,095          0%
interest rate fixed for less than 5 years and appears to be sustainable
*Foreclosure put on hold or in moratorium; final outcome unknown                         916           0%
*Mortgage refinanced (non-FHA product)                                                   767           0%
Executed a deed-in-lieu                                                                  565           0%
Brought mortgage current with rescue funds                                               519           0%
*Mortgage modified with PITI greater than 38% of gross monthly income or
                                                                                         362           0%
interest rate fixed for less than 5 years and appears not to be sustainable
Mortgage refinanced into FHA product                                                     293            0%
Obtained partial claim loan from FHA lender                                              231            0%
Received second mortgage                                                                 67             0%
Home lost due to tax sale or condemnation                                                 41            0%
Other                                                                                  44,408          20%
                                                                            Total:     220,730        100%
  Source: NFMC Program Reported Data
  Note: N=220,730




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NFMC Program Legal Assistance Efforts

Any client who has received counseling through the NFMC Program in Round 1, Round 2, or Round 3 is
eligible to be referred for legal assistance that is funded through the NFMC Program. Once referred by
their counselor for NFMC Program legal assistance, clients may receive a variety of services depending
on the specific issues presented by their case. The most common types of NFMC Program legal assistance
are a review of the homeowner’s case file (83% of clients received this service), advising the homeowner
on legal rights and options in foreclosure (79%), and interpreting loan documents (68%).

  Figure 5.1: NFMC Program Legal Assistance Services Received by Clients 
   90

   80

   70

   60

   50

   40

   30

   20

   10
                 68%              83%              55%             79%               58%         42%
    0
               Interpret        Review           Advise           Advise          Negotiate    Prepare
                 Loan         Client Files     Counselor         Client on          with      Documents
              Documents                        on Options        Options          Servicer       for
                                                                                              Homeowner

    Source: NFMC Program Reported Data
    Note: Clients can receive more than one service, thus numbers total more than 100%.


A majority of legal assistance provided through the NFMC Program was performed by non-profit legal
organizations (33%) and Legal Service Corporation affiliates (25%). Significant amounts of legal
assistance were also provided by attorneys in private practice (22%) and counseling agencies’ in-house
legal staff (19%). On average, clients received 2.7 hours of NFMC Program-funded legal assistance. These
clients typically need additional assistance, which is provided by the legal entities and funded with other
sources.

Overwhelmingly, the most commonly reported outcome for legal assistance cases is that the client’s
matter is still in negotiation with the servicer. This was the case for 59% of all legal assistance clients for
whom an outcome was reported. Ongoing analysis by the Urban Institute will be able to track longer-
term mortgage performance of NFMC Program clients who received legal assistance; those findings will
be reported when available.

In their quarterly reports, Grantees are asked to describe the successes and challenges they face in the
field. The successes reported in providing legal assistance involve improving program design,
developing new effective legal strategies, and achieving an overall positive experience for clients.
Notable successes in program design include creating a triage system for legal assistance referrals,
involving the attorney early in the foreclosure counseling process, having an attorney on staff so clients

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can receive immediate assistance, and partnering with local fair housing centers. Successful strategies in
legal assistance include demanding that the lender produce the note (many times the note is lost, and
thus the lender cannot satisfy the foreclosure filing requirements even if this is threatened), highlighting
predatory terms that warrant loan modification or principal reduction, intervening in cases where
servicers are not following guidelines of the Making Home Affordable program, and drafting letters for
victims of rescue scams to recover fees paid and other costs incurred. As to the overall effect of providing
legal assistance, Grantees report that their clients are more fully informed about their options and better
able to make important decisions confidently.

Legal assistance Grantees also face certain challenges in serving clients facing foreclosure. For instance,
some homeowners are reluctant to cooperate with an attorney, or cannot accept that foreclosure is
unavoidable, which makes them unwilling to discuss possible consequences. Grantees also report
difficulty finding attorneys with relevant experience to assist clients facing foreclosure, and express
frustration that some clients wait to seek help until their legal options are severely limited. Finally,
Grantees report that negotiations are made difficult by servicer inconsistency and lack of ready access to
servicers’ attorneys.

A more serious challenge in providing legal assistance has been within the statutory restriction on civil
litigation, which requires that no funds “shall be used to provide, obtain, or arrange on behalf of a
homeowner, legal representation involving or for the purposes of civil litigation.” In non-judicial
foreclosure jurisdictions, this restriction has meant that attorneys are not able to openly challenge a
mortgagee’s legal status and claim in court. In judicial foreclosure states, this has meant that clients
whose foreclosure actions have been filed are ineligible to receive legal assistance through the program.
Some Grantees report that aggressive foreclosure filing practices in their states have meant that the
majority of delinquent homeowners are not able to have their legal needs met through this funding. This
restriction has also had the unfortunate consequence of restricting NFMC Program legal assistance funds
from being used to pay for legal representation at court-ordered mediations and settlement conferences.
Overwhelmingly, Grantees convey that there is still an unmet need for assistance with complex legal
issues arising from the current foreclosure crisis.




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Urban Institute Interim Report
The Urban Institute recently presented NeighborWorks with the results of preliminary analyses that
attempt to measure the effects of the NFMC Program on counseled homeowners. Summaries from the
analyses are presented below, and the full report is available in Appendix D.


Background and Key Findings

In previous analyses undertaken as part of this evaluation, the Urban Institute reported, along with
descriptive information on the characteristics of homeowners and their mortgages, data on particular
loan outcomes for persons served by the NFMC Program. These previously reported outcomes included
(1) the share of NFMC Program clients who received a loan modification and, for clients who received a
loan modification, the type of modification and (2) the last observed status for clients’ loans. These data
indicated that about 11% of NFMC Program clients served through May 2009 received a loan
modification, and that 27% of all NFMC Program clients had, as their loan status of May 2009, either
entered or completed the foreclosure process.

While these descriptive statistics provide useful information about what happens to counseled
homeowners, they do not answer the question that is of real interest from an evaluation perspective:
What would have happened to NFMC Program clients had they not used the services offered by the
program’s Grantees? If the NFMC Program did not exist, presumably some clients would have not taken
any action to avoid foreclosure. Others might have (1) attempted to self-cure their delinquency, (2)
contacted their mortgage servicer to negotiate a loan modification on their own, or (3) used the services of
other counseling agencies not funded by the NFMC Program. Some persons would have been successful
in avoiding foreclosure, while others would not.

Furthermore, even with NFMC Program-provided counseling, it is not reasonable to expect that all
foreclosures could be avoided. For instance, some homeowners are in homes that they simply cannot
afford. While counselors may be able to help some of these clients negotiate better outcomes than
foreclosure, some foreclosures are likely inevitable in such cases. To evaluate the effectiveness of the
program, the Urban Institute conducted analyses to determine the following:

        Did the NFMC Program help homeowners cure an existing foreclosure?
        Did the NFMC Program help homeowners receive loan modifications that resulted in lower
        monthly payments than they would have otherwise received without counseling?
        Did the NFMC Program help homeowners avoid foreclosure?

To answer these questions, researchers used a series of multivariate models to determine the impact of
counseling in each of the cases listed above. The models were estimated on a representative sample of the
approximately 300,000 homeowners who received NFMC Program counseling during the first twelve
months of the program (January through December 2008) and a comparison sample of non-NFMC
Program counseled homeowners. Data included detailed characteristics of the mortgage loans and
borrowers, which were used to control for differences between the two samples, as well as information
on the performance of mortgage loans (foreclosure and delinquency status) through December 2008.
Researchers used data from LPS Applied Analytics, Inc. and from the Home Mortgage Disclosure Act to
match the homeowners from the NFMC Program production data with external data on mortgage
performance, and to obtain a sample of non-NFMC Program loans for comparison.




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This preliminary evaluation of program effects indicates that the initial answer to each of these questions
is “Yes,” although the magnitude of the effects varies depending on the particular outcome. As detailed
further in the report (Attachment D):

        The NFMC Program was effective at helping homeowners cure an existing foreclosure. Many
        NFMC Program clients entered counseling already in foreclosure (22%) or entered foreclosure
        after starting counseling (11%). During the first year of the program, counseled homeowners
        were about 1.6 times as likely to get out of foreclosure, and avoid a foreclosure completion, than
        they would have been had they not received NFMC Program counseling.

        Loan modifications received by NFMC Program clients resulted in significantly lower mortgage
        payments than would have been received without the help of the program. Lower monthly
        payments help reduce the likelihood of a subsequent recurrence of borrower mortgage problems.
        The Urban Institute estimated that, on average, NFMC Program clients who received loan
        modifications reduced their monthly payments by $454 more than they would have without
        NFMC Program counseling.

        The NFMC Program somewhat reduced the likelihood that counseled homeowners would end
        up in foreclosure. Urban Institute estimated that the NFMC Program helped approximately 880
        clients avoid going into foreclosure through December 2008. That is, the number of homeowners
        who were moderately delinquent (two or three months) and experienced a foreclosure would
        have been 4,975 compared to the 4,095 actual foreclosures estimated. By helping to avoid these
        foreclosures, the NFMC Program created potential cost-savings of $33 million between January
        and December 2008.

    NFMC Program’s Effect on Foreclosure Cures

The Urban Institute estimated whether homeowners in foreclosure were more likely to cure their
foreclosure, and thereby reduce the likelihood of losing their home if they made use of counseling
services provided by NFMC Program Grantees. Based on their analysis of the NFMC Program and LPS
data, 32% of counseled homeowners in our loan sample were in foreclosure sometime in 2008, compared
to 17% of the non-NFMC Program group. Researchers observed each of these loans to determine whether
a foreclosure cure occurred after the start of the current foreclosure episode, but before January 2009. In
some cases, homeowners who eventually sought NFMC Program counseling cured their foreclosure prior
to the start of counseling (about one third of the NFMC Program foreclosures). The Urban Institute did
not count these pre-counseling cures as an effect of the program; they only included cures that occurred
after the start of counseling.

The Urban Institute estimated the NFMC Program’s effect on a client’s likelihood of curing a foreclosure
with two models: one that used both NFMC Program clients and the loans within the comparison group
and a second model that used only NFMC Program client loans. The estimates from both models show a
strong positive treatment effect: clients who received services from NFMC Program Grantees were about
1.6 times more likely to cure their foreclosure than homeowners who did not receive such services from
NFMC Program Grantees. The estimated impact was nearly identical when NFMC Program clients were
compared to their experiences before entering treatment (the NFMC Program-only model) and when
NFMC Program clients were compared to a control group consisting of non-NFMC Program clients (the
NFMC Program versus non-NFMC Program model).

One potential issue with the analysis is that all servicers are not represented in the NFMC Program
sample, whereas it is likely that non-NFMC Program loans are serviced by a representative sample of all
servicers that report information to LPS. Nonetheless, the estimated program effect on the likelihood of

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foreclosure cures was the same whether NFMC Program clients were compared to non-NFMC Program
loans, or only NFMC Program loans were examined. Based on these results, it seems unlikely that the
servicers included in the NFMC Program sample somehow reflect an unrepresentative sample of
organizations that have either too liberal or too restrictive policies towards foreclosure cures.

The positive program effect on foreclosure cures was about the same regardless of the level of treatment
received by a client. Compared to receiving no counseling, recipients of Level One, Level Two and Level
Three counseling services all had a 1.5 to 1.7 times greater likelihood of curing a foreclosure. The
differences across counseling levels were not statistically significant, however, meaning that researchers
could not discern any differential effect based on the level of counseling service provided.

    NFMC Program’s Effect on Loan Modifications

One service provided by NFMC Program counselors is to call a client’s loan servicer to discuss the
possibility of modifying the mortgage to make it more affordable to the homeowner. Before making this
call, counselors use the expense and income information provided by the client to determine what type of
loan modification is necessary so that the new payment is affordable. Non-NFMC Program clients, of
course, can contact loan servicers themselves and request loan modifications, or receive counseling from
non-NFMC Program Grantees.

The LPS data allowed the Urban Institute to identify loan modifications, although not with complete
accuracy. Their method for identifying modifications was based on observed changes in loan terms that
were most likely to have reduced the monthly payments for the homeowner. Using this methodology,
they identified modified loans within both the NFMC Program and non-NFMC Program samples.

Approximately 18% of NFMC Program-counseled loans and 11% of non-NFMC Program loans received a
loan modification between January and December 2008. About one-quarter of NFMC Program clients
received their loan modification prior to the start of counseling services. These pre-counseling
modifications were not counted as a program effect.

Based on the analysis, NFMC Program client loans that were modified had a resulting monthly payment
that was $454 less, on average, than the non-NFMC Program-counseled loans that received a
modification. The overall counseling effect resulted in an additional 17% reduction in monthly payments
for NFMC Program clients compared to the sample group. This result suggests that NFMC Program
counselors were able to secure more generous loan modifications for their clients, compared to people
whose loans were modified without the assistance of NFMC Program counselors.

That NFMC Program-counseled homeowners received more favorable loan modifications than non-
counseled homeowners is a potentially very significant finding regarding the longer-term impact of the
program. Research on loan performance has highlighted a positive relationship between better mortgage
outcomes (such as foreclosure avoidance and reduced delinquency recidivism) and significant reductions
in monthly loan payments. In future analyses, the Urban Institute will examine the extent to which
recipients of loan modifications were able to keep current on their mortgages subsequent to having their
payment reduced.

    NFMC Program’s Effect on Foreclosure Avoidance

Of the 47,738 NFMC Program clients who were not in foreclosure when they entered counseling, 6,548
(14%) had a foreclosure start sometime between January and December 2008. The share of NFMC
Program clients whose foreclosure started after they began counseling was greater for owners whose
loans were delinquent as of January 2008, when Grantees started offering foreclosure prevention services.

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For instance, only 10% of NFMC Program clients who were current on their mortgage as of the beginning
of 2008 experienced a foreclosure after they started counseling. On the other hand, about a quarter of
NFMC Program clients whose mortgage was delinquent as of January 2008 experienced a foreclosure
after they started counseling. The share of NFMC Program clients whose loan went into foreclosure after
receiving counseling services was greater for clients whose loan was delinquent for longer periods: 20%
for those one month delinquent as of January 2008, 23% for two months delinquent, 26% for three months
delinquent, 30% for four or more months delinquents.

As a result of the high level of foreclosure starts prior to counseling, the Urban Institute was not able to
find positive NFMC Program effects for avoiding foreclosure when making comparisons to the sample of
non-NFMC Program clients. Researchers did, however, find positive effects for NFMC Program-
counseled homeowners who were two and three months delinquent on their loans, when compared with
other NFMC Program-counseled homeowners.

    NFMC vs. Non-NFMC Models

The Urban Institute’s analysis of foreclosure avoidance comparing NFMC Program and non-NFMC
Program loans did not yield any significant estimates of positive program effects. Most likely, this was
attributable to the high numbers of NFMC Program clients who were already in foreclosure prior to the
start of counseling. With so few NFMC Program clients in a position to avoid foreclosure, it was more
difficult for the models to discern a program effect, if indeed one exists. In addition, it is highly likely that
the Urban Institute lacked the necessary information, such as data on loss of income or unanticipated
household expenses, which would allow researchers to control for all of the factors necessary to
differentiate foreclosure outcomes between the NFMC Program and non-NFMC Program loans.
Therefore, the Urban Institute focused their analysis on the NFMC Program-only models for this
outcome.

    NFMC Program-Only Models

The results indicate that NFMC Program-counseled homeowners who were two or three months
delinquent on their mortgages as of January 2008 were significantly less likely to enter foreclosure after
the start of counseling. Homeowners who were two months delinquent would be only 83% as likely to
suffer a foreclosure once counseling had begun, as opposed to before counseling. The percentage of
foreclosures prevented by counseling is, therefore, 17% of those who entered counseling and who were
not yet in foreclosure. Similarly, NFMC Program-counseled homeowners who were three months
delinquent on their mortgages as of January 2008 were 81% as likely to start foreclosure as they were
prior to counseling.

The only other result that was statistically significant was for homeowners who were current on their
loans as of January 2008. These homeowners were 1.5 times more likely to start a foreclosure after
entering counseling than they were prior to counseling. The researchers consider this to be a spurious
finding, however, as it does not seem reasonable to attribute such a detrimental effect to the counseling
program itself. One possible explanation might be that certain people who were still current on their
mortgages at the start of the year, but who later suffered a serious unanticipated problem (such as a job
loss), might proactively enter counseling shortly before foreclosure is imminent. Since it would be highly
unlikely at that point for the homeowner to avoid a foreclosure start, counseling might appear to be
correlated with higher foreclosure rates for these homeowners, even though counseling was not the cause
of the problem.

The impact of counseling is not statistically significant for those borrowers either one month delinquent
or four or more months delinquent at the start of the year. That researchers could not find a significant

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counseling impact for clients with severe delinquencies is consistent with the Urban Institute’s early field
work information and review of the literature, in which counseling agencies report the greatest likelihood
of success for people who come into counseling fairly soon after their problems arise. The impact of
counseling in those cases may be more to cure foreclosures after they occur than to avoid a foreclosure
start.

Overall, about 260,000 clients were served in calendar year 2008, of which 7% (18,200 clients) were two
months delinquent as of January 2008 and 4% (10,400) were three months delinquent. Based on their
sample of loans with performance information, the Urban Institute estimates that 2,708 loans that were
two months delinquent went into foreclosure during 2008 and 1,387 loans that were three months
delinquent went into foreclosure during the same period. Without the NFMC Program, the Urban
Institute estimates that a total of 880 additional loans (555 that were two months delinquent in January
2008 and 325 that were three months delinquent as of January 2008) would have gone into foreclosure
during 2008.

A recent report estimates that foreclosures create costs that average about $37,300 per foreclosed loan.
Therefore, the Urban Institute roughly estimates that the NFMC Program, by preventing 880 foreclosures,
created savings of about $33 million between January and December 2008 (assuming that all of these
foreclosures would have been completed at some time in the future). This estimate does not include the
impact of NFMC Program counseling on the ability of clients to cure their foreclosures, which creates
similar savings as foreclosures avoided. Moreover, the above estimate does not include differences in
payments from loan modifications that NFMC Program clients received compared to modifications they
would have received without the help of NFMC Program counseling.


Conclusion

Round 1 of the NFMC Program served about 260,000 clients through December 2008. An overwhelming
share of the program’s clients was in financial distress, primarily due to a loss or reduction in their
income. As a result, an overwhelming share of these clients were delinquent on their mortgage when they
started counseling, and nearly one-quarter of NFMC Program clients received a foreclosure notice before
they obtained counseling services.

The Urban Institute’s preliminary analysis of the NFMC Program, using data on loan performance
through December 2008, suggests that the program is having its intended effect of helping homeowners
who are facing loss of their homes through foreclosure. In subsequent analyses, researchers will be able to
estimate the program’s impact on clients who received counseling services in 2009. They will also observe
loan performance over a longer period of time, which will allow for a better measurement of the overall
success of the NFMC Program.

Indeed, as the Urban Institute only observed data through December 2008 in this preliminary analysis,
they may find more foreclosures avoided as the time period for observing loan performance is extended
and data for more clients is analyzed. The analysis to date has suggested that receiving good loan
modifications – ones that are likely to reduce the amount of the homeowner’s monthly payment to an
affordable level – greatly improves client outcomes. These findings are consistent with other research
(OCC and OTS 2009). The period for this analysis, 2008, was one in which loan modifications were
reportedly more difficult to obtain than currently. For example, the federal government introduced the
Making Home Affordable program in 2009, which is intended to help more homeowners obtain sustainable
loan modifications by offering financial incentives to lenders. If they do, in fact, see more NFMC Program
clients obtaining loan modifications in the second program year, then they would hope to observe better
outcomes for these homeowners as well.

          56 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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Counseling Successes and Challenges
As part of their quarterly reports, NFMC Program Grantees are asked to identify key successful
counseling strategies and challenges they encountered while counseling clients facing foreclosures.
Grantees could list any successes and challenges they wanted, leading to numerous responses. Following
is an in-depth analysis of the 1,282 successes and 1,290 challenges Grantees reported for activity that
occurred between January 1, 2008 and August 18, 2009.

Part of the analysis looks at how the reporting of successes and challenges changed over time. Since
Grantees report them quarterly, a trending analysis was conducted. The breakdown of quarters is: first
quarter, January 1 through June 30, 2008 (as the program allowed for the retroactive reporting of clients
prior to its official start on March 1, 2008); second quarter, July 1 through September 30, 2008; third
quarter, October 1 through December 31, 2008; fourth quarter, January 1 through March 31, 2009.

The successful strategies Grantees reported centered on:
       creating a more efficient counseling process;
       effective counseling methods;
       communicating with servicers; and
       outreach to homeowners in need.

Grantees reported facing challenges with:
       efficient and timely communication with lenders and servicers;
       obtaining workable mortgage solutions from servicers for homeowners;
       homeowner resources and interactions; and
       counseling program administration.


Counseling Successes

Reported successes were separated into categories. The most frequently reported category of successful
strategies involved creating a more efficient counseling process (42.3%). Also commonly reported were
successes using specific methods of foreclosure counseling (31.0%). A somewhat smaller percentage of
successes were reported in communicating with servicers (14.4%) and conducting client outreach (12.5%).

  Figure 6.1: Percentage of Successes by Category 
   45

   40
   35

   30

   25
   20

   15

   10
    5
                   42.3%                    31%                 14.4%             12.5%
    0
              Creating a More        Effective Counseling   Communicating     Client Outreach
            Efficient Counseling           Methods           with Servicers
                   Process
        Source: NFMC Program Reported Data

          57 | P a g e             National Foreclosure Mitigation Counseling Program Congressional Update
                                                  Program administered by NeighborWorks® America
                                                                                            November 16, 2009
Over time, successes in each of the four categories were reported at roughly the same rate. Grantees
reported slightly more success with creating efficient counseling processes in the second and third
quarters than others quarters. The three other categories reported at the same rate throughout the course
of the program.

  Figure 6.2: Trend Analysis of Percentage of Successes by Category 

  50
  45
                                                                                                          Creating a More Efficient
  40                                                                                                      Counseling Process
  35
                                                                                                          Effective Counseling
  30                                                                                                      Methods
  25                                                                                                      Communicating with
  20                                                                                                      Servicers
  15                                                                                                      Client Outreach
  10
   5
   0
          1st Quarter        2nd Quarter            3rd Quarter           4th Quarter

    Source: NFMC Program Reported Data


An analysis was also performed on how frequently individual successes were reported. Overall, the most
commonly reported individual success was helping clients create a budget and action plan. More than
15% of all successes reported by Grantees pertained to this. The next three most commonly reported
successes were all associated with implementing efficient counseling processes: holding foreclosure
prevention workshops or group orientation sessions (7.2% of all responses); increasing capacity by hiring
and training additional staff, expanding services, and making services available outside normal business
hours (5.8% of all responses); and increasing efficiency through time management, standardization, use of
technology, and division of labor (5.4% of all responses).
   
  Figure 6.3: Percentage of Most Commonly Reported Individual Successes
   16

   14                                                              Creating a More Efficient Counseling Process
                                                                   Effective Counseling Methods
   12
                                                                   Communicating with Servicers
   10                                                              Client Outreach

    8

    6

    4

    2
              15.2%          7.2%            5.8%           5.4%               4.5%               4.3%
    0
              Create         Hold         Hire and          Make           Persistence          Create
            Budget and    Workshops      Train Staff,     Processes           with           Community
            Action Plan    or Group        Expand           More            Servicers        Partnerships
                          Orientation       Hours         Efficient

        Source: NFMC Program Reported Data

          58 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                               Program administered by NeighborWorks® America
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    Creating a More Efficient Counseling Process

Of all the successful strategies Grantees used in delivering counseling to homeowners facing foreclosure,
nearly half (42.3%) related to developing more efficient processes to meet the high demand for
counseling. This was the most frequently reported type of success in the NFMC Program. Grantees
stated that the most notable successes they encountered in counseling clients efficiently were:
         holding foreclosure prevention workshops and group orientation sessions, so they could respond
         to the high demand for counseling intake and give counselors more time to focus on quality one-
         on-one counseling (17.1% of category; 7.2% of all successes reported);
         increasing capacity by hiring additional staff, expanding services, having staff available around
         the clock, providing staff training, and keeping counselors informed about servicers and new
         Federal programs (13.8% of category; 5.8% of all successes);
         using efficient organizational methods to increase production and quality of counseling, such as
         keeping/making appointment times, using standardized processes and forms when working
         with servicers, using electronic data gathering systems, and dividing labor among specialized
         employees instead of using single-employee case-management styles (12.8% of category; 5.4% of
         all successes);
         making the intake system more efficient by requiring the client to have necessary documentation
         at the first meeting, and by having intake information and documents available online (9.9% of
         category; 4.2% of all successes).

    Holding workshops and group sessions

Grantees consistently cited foreclosure intervention workshops and orientation sessions as the most
successful strategy for running an efficient counseling program. In the fourth quarter, it was the most
commonly reported success, comprising 12.2% of all responses. The primary benefit of holding
foreclosure workshops and group orientations was the efficiency of teaching many homeowners about
the foreclosure process and possible outcomes at once. Using workshops as an introduction to
foreclosure education saved valuable counselor resources for more time-intensive work, such as
reviewing budgets, developing specialized action plans, and negotiating with servicers. Other benefits
attributed to these foreclosure workshops included: clients were reassured to know that others are in the
same situation, interested homeowners could attend these open workshops immediately without waiting
for an appointment, participants benefited from others’ questions, and agencies partnered with attorneys
and other agencies to provide an array of needed services at workshops.

    Increasing Capacity

Grantees have also experienced success in increasing their capacity to serve clients facing foreclosure.
These capacity-building efforts include hiring additional staff, expanding services, providing services
outside of normal business hours, training staff, and keeping counselors up to date on new information
about servicers and Federal programs. Grantees reported particular success with recruiting and training
volunteers, operating foreclosure hotlines, increasing service to non-English speaking populations, and
serving new areas through satellite locations. Meeting with clients in the evenings and on weekends was
another common successful strategy. As one Grantee explained, “Many clients in foreclosure may not be
able to take time off of work to meet with counselors. They can't afford to lose income or risk their jobs by
taking time off.” Perhaps not surprisingly, successes related to capacity-building were most common in
the first quarter of the NFMC Program, when counseling agencies across the country were responding to
need with the influx of new grant resources.




          59 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
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    Using Efficient Organizational Methods

In addition to increasing staff and training resources, Grantees report that improving organizational
practices was a major component of counseling more efficiently. As a trend, this strategy seems to have
gained momentum over time – growing from 4.4% of all responses in the first quarter to 6.3% of all
responses in the third quarter. The improved organizational practices often included keeping and
making appointment times, using standardized processes and forms to communicate with servicers,
using electronic data gathering systems, and using a division of labor approach rather than case
management style. Making improvements to the client intake process was another important way
Grantees reported delivering efficient counseling services. This often involved standardizing the intake
process, requiring clients to bring certain documents to the first appointment, and making intake forms
available on the internet. Ultimately, these efficiencies in intake were aimed at saving counselor time and
attention for clients who were seriously committed to saving their homes. At least one Grantee
commented that in the face of such high volume and client turnover, their new intake process was a way
to protect counselors from burnout.

    Effective Counseling Practices

Use of specific effective counseling practices were the second most common category of reported
successes by Grantees, accounting for 31%. The most frequently reported specific effective counseling
methods were:
        helping the client create a budget and action plan (49% of category; 15.2% of all successes
        reported);
        submitting a well-compiled loss mitigation packet complete with information about
        underwriting and local market conditions, a hardship letter, and proposed workout to their
        servicer (11.9% of category; 3.7% of all successes);
        facilitating communication between the servicer and borrower by phone or at larger events
        where the parties can meet face-to-face (10.6% of category; 3.3% of all successes); and
        educating the client about the foreclosure process, different loss mitigation efforts, and the
        counseling process (8.8% of category; 2.7% of all successes).

    Helping Client Create Budget and Action Plan

When creating budgets and action plans with clients, Grantees reported that it is crucial to have clients
make the tough decisions that will lead them to a balanced and realistic budget. Grantees find that, while
time consuming, developing a detailed budget has many benefits: it allows clients to define their goals, it
can show a monthly budget surplus that is helpful in negotiating with servicers, and ultimately helps
clients understand that saving their home from foreclosure might be a realistic goal. In many instances,
Grantees report, meeting with a counselor is the first time many clients have truly considered what size
mortgage payment they can afford.

    Submitting Well-Compiled Package to Servicer

Another foreclosure counseling practice of increasing importance is submitting a well organized and
complete loss mitigation packet to the servicer. This strategy varies depending on a household’s
circumstances. For some clients, it means sitting down to help write a hardship letter that explains their
short-term delinquency; for others, it means submitting evidence that the client’s mortgage was
affordable before the interest rate reset. Some Grantees comment that submitting carefully-assembled
packets and recommending a specific workout option puts counselors in a better position to negotiate,
because it reduces the likelihood of lost paperwork and gives the servicer an immediate picture about
what type of solution is needed for the client.

          60 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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                                                                                        November 16, 2009
    Facilitating Communication

The third most common successful counseling practice in this category involves facilitating
communication between the homeowner and the servicer. For instance, many Grantees reported success
in having three way calls in which the servicer, homeowner and counselor can all discuss the
homeowner’s present situation. In those cases, it is helpful for the client to feel comfortable
communicating directly with the servicer, and to hear firsthand what steps are required in moving
forward. Some agencies have been successful in hosting larger events where servicers come on-site to
meet with many homeowners face-to-face. Facilitating communication between lender and borrower is a
way for counselors to keep their clients involved and empowered in the foreclosure intervention process.

    Educating Clients

Finally, Grantees have reported that an important practice in this category is taking time to explain the
foreclosure process and timeline, describe all the different options a homeowner might have, and define
the counselor’s role in helping the homeowner throughout the process. This education component of
counseling empowers the client to make informed decisions. In particular, counselors find it helpful to
manage expectations up front so that clients can proceed with realistic goals and alternate plans. Some
organizations now use a client-counselor contract that describes each party’s rights and responsibilities.

    Communicating with Servicers

Communicating with servicers has posed a serious challenge for Grantees, but has also provided an
opportunity for Grantees to develop new strategies and ultimately to achieve some success.
Communicating with servicers made up 14.4% of all successes reported. The four most common
successful strategies here include:
        being persistent with the servicer, following up with the servicer, and countering the servicers’
        offers when what they’ve proposed is not affordable for the client (31% of category; 4.5% of all
        successes reported);
        establishing good working relationships with servicers and maintaining good rapport with their
        representatives (23.4% of category; 3.4% of all successes);
        communicating efficiently with servicers (22.3% of category; 3.2% of all successes); and
        escalating cases to higher level management, government officials, or investors (16.3% of
        category; 2.4% of all successes).

    Being Persistent

Persistent follow-up with the servicer is the most frequent successful strategy reported by Grantees in
this category. Some counselors call to confirm receipt of the loss mitigation packet, and then call weekly
to confirm that the file is under review. In most instances, Grantees say that documenting every contact
with a servicer is an important practice. Grantees have also reported that counselors are having success
in pushing back and getting better work out options for their clients.

    Establishing Good Relationships

Grantees note that maintaining a good working relationship with servicers was an important counseling
strategy. Grantees did this in a number of ways – by attending homeowner prevention forums with
servicers, hosting the servicers to work on-site in their counseling offices, establishing personal contacts


          61 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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in the loss mitigation department, and entering into agreements with servicers about their treatment of
homeowners who are seeking counseling assistance.

    Communicating Efficiently and Escalating

In communicating with servicers, Grantees have also reported success in communicating efficiently, and
in escalating cases where the servicer’s agent is not responsive. To communicate efficiently, Grantees
often maintain contact lists that allow them to reach specific servicer personnel directly. In cases that
warrant escalation, Grantees have begun to contact the senior managers at servicing companies or their
own state banking agencies when servicers’ agents are not responsive. Grantees also report getting
Congresspersons involved in some cases.

    Outreach to Homeowners in Need

Conducting special marketing and outreach to delinquent homeowners was the third most frequently
reported category of successes, comprising 12.45% of all successes reported. Overwhelmingly, this
outreach focuses on the importance of seeking help quickly and the top specific strategies for conducting
outreach were:
        creating partnerships with faith-based organizations, employers, utility companies, local task
        forces, and public officials to encourage homeowners in crisis to seek counseling (34.6% of
        category; 4.3% of all successes reported);
        advertising in various formats, such as flyers, billboards, and TV and radio spots (25.2% of
        category; 3.1% of all successes);
        participating in a statewide network that engages in outreach and provides referrals from a
        hotline (10.7% of category; 1.3% of all successes); and
        targeting homeowners who may be in default by including information about counseling services
        in foreclosure notices or searching the public records for information about delinquency (8.8% of
        category; 1.1% of all successes).

    Creating Partnerships

Partnering with other trusted organizations to reach homeowners in need was the most cited successful
outreach strategy. By working with elected officials, faith-based groups, and community organizations,
Grantees were able to leverage that positive exposure, overcome the stigma of foreclosure, and encourage
clients to access free counseling assistance. Some Grantees reported new and creative partnerships with
realtors, employers, and utility companies.

    Advertising

Traditional advertising methods like paper and radio ads also played a role in counseling outreach.
Grantees expressed that their best strategy here was to tailor the marketing to their own organization’s
needs. For instance, promoting their counseling services in multiple languages, advertising in minority
newspapers, and providing group information sessions following church services were all ways that
Grantees targeted their outreach to their client base. One Grantee recorded public service
announcements with mayors from across their state, so that radio listeners would know they were a
reputable agency supported by local government.

    Working with Statewide Networks

Working within a statewide network has also proven to be a successful outreach strategy for many
Grantees. Some states operate foreclosure prevention hotlines as a single point of contact for

         62 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                               Program administered by NeighborWorks® America
                                                                                       November 16, 2009
homeowners in crisis, and then refer homeowners to local counseling agencies. These statewide
collaborations have also been useful for coordinating regional marketing efforts and providing additional
support resources for clients.

    Targeting Homeowners in Trouble

The fourth top-reported strategy for outreach was targeting homeowners who were known to be
delinquent or in foreclosure (8.8%). This strategy usually relies on cooperation from other players. For
instance, one Grantee sends postcards to homeowners whose names were listed in the newspapers as
having received a foreclosure notice. Another Grantee cooperated with the state courts so that a list of
housing counseling agencies is sent out with all foreclosure summonses in that jurisdiction. Other
Grantees have mobilized their local grassroots network to make door-to-door visits to households that
have received Notices of Default.

        Time Analysis

In aggregate, Grantees reported between 366 and 406 successes in their quarterly reports during the first
three quarters. In the fourth quarter, 123 successes were reported – likely because many Grantees
received extensions to complete their Round 1 goals and were not required to submit quarterly reports
during this time.

    First Quarter (1/1/08 – 6/30/08)
In all four quarters of the NFMC Program’s first year, Grantees’ most commonly reported successes
involved creating a more efficient counseling process. In the first quarter, these responses accounted for
40.4% of all successes. Successes with creating effective foreclosure counseling practices accounted for
31% of all successes in this reporting period. Successes directly related to client outreach and those
directly related to communicating with servicers both accounted for 14.3% of all reported successes.
When looking at the specific individual successes reported in the first quarter, the most common success
according to Grantees was helping the client create a budget and action plan to get to the heart of the
their financial problems (15.5%). The second-most common individual success they reported was
increasing capacity by hiring additional staff, expanding services, having staff available after hours, and
training staff about new developments in the industry (7.9%). Holding foreclosure prevention
workshops and group orientation sessions that reduced counselors time spent on intake was also a
notable success in the first quarter (6.2%).

    Second Quarter (7/1/08 – 9/30/08)
During the second quarter, Grantees again reported that successes related to creating a more efficient
counseling process were the most common type of success they faced, accounting for a slightly higher
percentage of all successes reported (42.7%) than in the first quarter. Successes involving specific
methods of counseling were again the second most-reported, accounting for 32.2%. Successes in
communicating with servicers decreased slightly to 13.9%, as did successes related to client outreach
(11.3%). Grantees reported that effective foreclosure counseling methods like creating a budget and
action plan were still the most common individual success, increasing from the first quarter to account for
17.3% of total successes. There was also a slight increase in the percentage of reported successes that
pertained to holding foreclosure workshops and group orientation sessions. Perhaps not surprisingly,
the second quarter saw a decline in the percentage of successes involving hiring new staff and expanding
capacity. While this success accounted for nearly 8% of all successes in the first quarter, it fell to just 3.7%
of successes reported in the second quarter.




          63 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                             Program administered by NeighborWorks® America
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     Third Quarter (10/1/08 – 12/31/08)
During the third quarter, successes with creating more efficient counseling processes were the most
common success, rising for the third straight quarter to account for 44.3% of all successes reported by
Grantees. Successes directly related to creating an efficient counseling process accounted for 29.2% of
total successes, followed by communicating with servicers and client outreach (15.8% and 10.7%,
respectively). For the third consecutive quarter, the use of effective counseling methods like creating a
budget and action plan was the most commonly reported individual success (13.7%). Capacity building
like hiring additional staff, extending hours, and expanding services were a top reported success in this
quarter – rising to 6.6% of all individual successes reported. In the third quarter, Grantees reported more
successes with using efficient organizational methods to increase counseling production and enhance the
quality of counseling. This success accounted for 6.3% of all successes reported during the third quarter.

    Fourth Quarter (1/1/09 – 3/31/09)
During the fourth quarter of the NFMC Program, the proportion of Grantee-reported successes that
involved creating a more efficient counseling process (39.8%) and implementing effective methods of
counseling (32.5%) remained consistent. However, successes related to client outreach were at a program
high of 15.4% of all successes reported, while successes related to communicating with servicers were
reported at the lowest percentage to date (12.2%). In the fourth quarter, the most frequently reported
individual successes again involved creating budgets and action plans, and holding foreclosure
prevention workshops. Both of these successes accounted for 12.2% of all successes reported. Grantees
also experienced new success with creating community and faith-based partnerships to encourage
troubled homeowners to seek help, with this success accounting for 6.5% of all responses. Interestingly,
the fourth quarter saw two new foreclosure counseling methods emerge as commonly-reported
successes. Both the practice of facilitating better communication between servicer and borrower, and the
practice of submitting complete loss mitigation packages comprised 5.7% of all successes reported in this
quarter.


Counseling Challenges

Reported challenges were separated into categories. The most commonly reported categories of
challenges pertained to working with servicers (47.8%). Grantees reported that the majority of the
challenges they face were related to communication with servicers, which accounted for 32.6% of total
challenges. Another category of challenges Grantees reported facing when working with servicers was
obtaining workable mortgage solutions for homeowners (15.2%). Grantees commonly reported that they
encountered challenges that pertained to homeowners’ resources, and counselors’ interactions with
homeowners (37.2%). Challenges related to program administration accounted for the lowest proportion
of challenges (15%).




          64 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
                                            Program administered by NeighborWorks® America
                                                                                        November 16, 2009
  Figure 6.4: Percentage of Challenges by Category 
   40

   35

   30

   25

   20

   15

   10

    5
               32.6%           15.2%            37.2%             15.0%
    0
              Efficient       Obtaining       Homeowner        Counseling
             and Timely       Workable       Resources and      Program
           Communication      Mortgage        Interactions    Administration
            with Servicers    Solutions

        Source: NFMC Program Reported Data


When looking at what categories of challenges Grantees reported over time, those pertaining to
homeowner resources and interactions decline as the program matures, while challenges associated with
program administration increase slightly. Challenge categories related to servicers are reported at the
same rate throughout the program.

  Figure 6.5: Trend Analysis of Percentage of Challenges by Category 

  45                                                                                 Efficient and Timely
  40                                                                                 Communication with
  35                                                                                 Servicers

  30                                                                                 Obtaining Workable
                                                                                     Mortgage Solutions for
  25
                                                                                     Homeowners
  20
                                                                                     Homeowner Resources
  15                                                                                 and Interactions
  10
   5                                                                                 Counseling Program
   0                                                                                 Administration
          1st Quarter        2nd Quarter        3rd Quarter          4th Quarter

    Source: NFMC Program Reported Data


Overall, the most commonly reported individual challenges reported by Grantees were that homeowners
are not prepared for counseling sessions or do not follow through with counselors (11.8%); they face
general difficulty communicating with servicers (9.8%); and once they do contact servicers, obtaining
decisions from servicers on workout packages takes excessively long (8.8%). Of the Grantees that
reported this, more than a third reported that responses take at least 60 or 90 days on average.




          65 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                               Program administered by NeighborWorks® America
                                                                                    November 16, 2009
  Figure 6.6: Percentage of Most Commonly Reported Individual Challenges 
   14
                                                                   Efficient and Timely Communication with Servicers
   12
                                                                   Homeowner Resources and Interactions

   10                                                              Counseling Program Administration


    8

    6

    4

    2
               11.8%            9.8%            8.8%            5.9%              5.7%                 5.6%
    0
               Lack of         General       Obtaining a    Insufficient      Homeowner          Servicers Were
            Homeowner        Difficulty    Timely Response Staff or Funds    Experienced a         Generally
            Preparedness   Communicating from Servicer                       Reduction in        Uncooperative
             and Follow     with Servicers                                      Income
              Through

        Source: NFMC Program Reported Data



    Efficient and Timely Communication with Servicers

Grantees stated that the most significant challenges they encountered while trying to communicate with
servicers on behalf of homeowners were:
        it is extremely difficult to contact servicers (20.6% of category; 9.8% of all challenges reported);
        obtaining a response from servicers on workouts routinely takes excessively long, with an
        average of at least 60 or 90 days to receive a response (18.5% of category; 8.8% of all challenges);
        servicers are uncooperative in general (11.7% of category; 5.6% of all challenges); and
        documentation that is faxed or mailed to servicers is lost repeatedly, or servicers will not work
        with counselors (7.6% of category; 3.6% of all challenges).

    Contacting Servicers

Among challenges related to efficient and timely communication with servicers, Grantees reported that
general difficulty communicating with servicers was the most common challenge (9.8%). Grantees cited
difficulty getting servicers to return their calls and being left on hold for an extended amount of time.
They reported having difficulty reaching the loss mitigation department or someone in a decision-making
position. Instead, they are routed to bill collectors who seem to have little knowledge of or regard for
homeowners’ need for loss mitigation, or their pending workouts. During the fourth quarter, it was the
most commonly reported challenge overall (12%).

    Obtaining a Timely Response

Not only is generally communicating with servicers difficult, Grantees also reported that once they
submit a workout package, obtaining a response from the servicers takes excessively long. Of the 8.8% of
challenges that reported excessive response time, 37.7% reported specific time frames of at least 60 or 90
days on average. Some Grantees reported that they did not receive responses for as long as six months.


          66 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
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                                                                                                   November 16, 2009
One Grantee reported that one particular servicer routinely takes three to six months to issue a response
on a workout package.

    Servicers are Uncooperative

The challenge of dealing with uncooperative servicers accounted for 5.6% of the total challenges reported.
Grantees reported that servicers often refuse to negotiate or put workouts in writing. One Grantee
reported that “Each and every servicer has acted, at one time or another, in an intentionally obstructionist
manner, setting unreasonable requirements on counselors and clients alike.” Some servicers indicated to
Grantees that they had halted negotiations because they were waiting for “bailout” money from the
federal government.

    Lost Documentation or Won’t Work with Counselors

Grantees also reported other challenges pertaining to efficient and timely communication with servicers.
They reported that servicers repeatedly lose documentation that counselors fax or mail to them, requiring
counselors to spend time resending documents (3.6%). Among the documentation lost are the third party
authorization forms, preventing counselors from discussing anything with servicers on behalf of the
client. Additionally, Grantees reported the challenge of servicers not acknowledging the role of the
counselor in the loss mitigation process (1.6%), and some reported that these servicers contact the client
directly with unaffordable loan workouts, or simply refuse to recognize the counselor’s third party
authorization.

    Obtaining Workable Mortgage Solutions for Homeowners

Once counselors reach servicers, they still find it difficult to obtain workable mortgage solutions for
homeowners. This type of challenge accounted for 15.2% of the total challenges Grantees reported.

The most notable challenges that Grantees reported facing when they attempted to obtain a workout
from servicers were:
        refinance plans offered by servicers are not affordable to homeowners (9.4% of category; 4.5% of
        all challenges reported);
        subprime and exotic loans are no longer affordable for the homeowner and are extremely
        difficult to restructure (5.2% of category; 2.5% of all challenges);
        homeowners obtained loans that were not affordable at origination and servicers are unwilling to
        modify the loans (4.2% category; 2% of all challenges);
        repayment plans are offered frequently, workouts offered with less frequency, but forbearance or
        principle write-downs are extremely uncommon (3.6% of category; 1.7% of all challenges); and
        servicer representatives do not understand pooling and servicing agreements (3.2% of category;
        1.6% of all challenges).

    Unaffordable Refinance Plans

The most common challenge that Grantees reported when attempting to obtain workouts on behalf of
homeowners was that the resolutions that servicers propose are not affordable to the homeowners, which
leads to re-defaults. This challenge accounted for 4.5% of total challenges reported. Grantees reported
that servicers are unwilling to offer workouts that are affordable in the long term. According to one
Grantee, “The servicer offers a payment plan to a homeowner that cannot afford the mortgage payment,
let alone the mortgage payment and an arrearage each month.” Nearly 2% of the total challenges
Grantees reported expressed that repayment plans are offered frequently, but loan modifications are
offered less frequently and forbearance or principle write-downs are extremely uncommon.

          67 | P a g e        National Foreclosure Mitigation Counseling Program Congressional Update
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    Difficult to Modify Some Loans

Another challenge that Grantees reported encountering was attempting to modify subprime or exotic
loans (2.5%). Some homeowners can no longer afford their adjustable rate mortgages after the interest
rate resets. Grantees reported that these loans are difficult to modify because of conditions attached to the
note. They also reported that they were challenged by homeowners with stated income loans who cannot
verify enough income to qualify for any available workouts. Grantees also reported that it is difficult to
modify negative amortization loans for clients in a way that makes them more affordable to the
homeowner.

    Homeowner Resources and Interactions

Challenges related to homeowner resources and counselors’ interactions with homeowner were the
second-most common type of challenge that Grantees reported facing. These challenges accounted for
37.2% of total challenges reported.

The most significant challenges that Grantees faced when interacting with homeowner were:
       homeowners are not prepared for counseling sessions or do not follow through with counselors
       (31.7% of category; 11.8% of all challenges reported);
       homeowners that are experiencing a reduction in income often related to job loss or
       underemployment (15.2% of category; 5.7% of all challenges);
       homeowners seek help too late in the foreclosure process (11.9% of category; 4.4% of all
       challenges); and
       homeowners lack knowledge of personal finance or have poor money management skills (8.3% of
       category; 3.1% of all challenges).

    Homeowners are not Prepared for Counseling Sessions

In this category, Grantees reported that they were most challenged by a lack of homeowner preparedness
for counseling sessions and a lack of homeowner follow-through with counselors (11.8%). Grantees
reported difficulty obtaining the necessary paperwork from homeowners, some of whom do not bring
the documentation to the first counseling session, and some who are slow to return requested
information. Other homeowners are reluctant to stick to budgets that counselors outline for them.
Counselors had additional difficulty getting some homeowners to disclose their full financial
information. These instances accounted for the greatest proportion of challenges reported from the first
through the third quarters, and declined to the third most common challenge in the fourth quarter.

    Unemployed and Underemployed Homeowners

Another challenge that Grantees reported was helping homeowners who experience a reduction in
income that leaves them unable to pay their mortgage. Unemployment and underemployment both play
roles in homeowners’ reduction in income. This challenge accounted for 5.7% of all challenges reported.

    Homeowners Seeking Help Too Late in Process, and Lacking Personal Finance Knowledge

Grantees reported that they were also challenged by homeowners who seek help too late in the
foreclosure process (4.4%). In some cases homeowners seek help one week prior to foreclosure. Other
homeowners wait until they are 90 days delinquent before they seek the help of the counselor.
Homeowners with little knowledge of mortgages or personal finance, as well as homeowners with poor
money management, bad credit, and high debt posed a challenge to Grantees as well (3.1%).

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    Counseling Program Administration

Challenges related to the foreclosure counseling program administration were the least commonly
reported category of challenges, accounting for 15% of all challenges reported.

Some notable challenges that Grantees experienced when administering their housing counseling
programs were:
       insufficient staff and/or funding to meet counseling demand (39.4% of category; 5.9% of all
       challenges reported);
       too much information about each homeowner is required by the NFMC Program (20.7% of
       category; 3.1% of all challenges);
       there is a lack of rescue funding for homeowners (16.6% of category; 2.5% of all challenges); and
       NFMC Program computerized reporting systems could be more efficient (10.4% of category; 1.6%
       of all challenges).

    Insufficient Staff and Funding

Grantees reported a lack of sufficient staff and/or funding as the most common challenge related to
program administration, accounting for 5.9% of total challenges. This challenge grew to account for
11.2% of all challenges during the fourth quarter. Grantees reported that they do not have a large enough
staff to meet the demand for counseling services. They also reported that counselors are getting burned
out and frustrated with the counseling process. Others reported that they do not have sufficient staff to
dedicate to other services, such as pre-purchase counseling, because they dedicate so much of their staff’s
time to foreclosure counseling.

    Information Requirements and Reporting

Another challenge that Grantees faced when administering their foreclosure prevention programs is the
amount of information Grantees must gather from each homeowner in order to receive NFMC Program
funding for that counseling unit (3.1%). Grantees reported that the information takes too much time to
gather and report, and does not coincide with the reporting requirements for grants from the U.S.
Department of Housing and Urban Development. They also reported that because they have difficulty
getting the required information from homeowners, they cannot receive funding for those units of
counseling. Additionally, Grantees are challenged by problems with the computerized reporting systems.
This problem accounted for 7.2% of all problems reported during the fourth quarter (1.6% of total), with
Grantees stating that computerized reporting systems are not available as quickly as desired, and do not
collect all data fields that would accurately reflect a homeowner’s situation. (The NFMC Program has
taken this into consideration, but has also received significant feedback from Grantees against adding
additional data collection requirements, and it would be costly to update client management systems to
do this.)

    Time Analysis

The individual data for each of the first three quarters was reflective of the aggregate data. The highest
number of challenges (423) was reported during the first quarter, and the number of challenges declined
steadily throughout each quarter. Grantees reported 388 challenges in the second quarter and 354 in the
third quarter. During the fourth quarter, 125 challenges were reported as many Grantees were in
extension to complete their Round One goals and were not required to submit quarterly reports during
this time.


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     First Quarter (1/1/08 – 6/30/08)
In the first quarter, Grantees most commonly reported they were challenged by difficulties when working
with servicers, which accounted for 45.9% of challenges. Grantees reported that challenges directly
related to efficient and timely communication with servicers accounted for 30.7% of total challenges, and
those directly related to obtaining workable mortgage solutions for homeowners accounted for 15.1% of
total challenges. Challenges related to homeowner interactions and resources accounted for 37.4% of total
challenges. When looking at individual challenges, Grantees reported that the most common challenge
they faced was a lack of homeowner preparedness and follow-through (11.6%). The second-most
common individual challenge they faced was communicating with servicers, which accounted for 10.6%
of total challenges. The excessive amount of time homeowners waited to receive a decision on a workout
package from servicers was also a notable challenge (7.8%).

    Second Quarter (7/1/08 – 9/30/08)
During the second quarter, Grantees reported that challenges related to working with servicers were the
most common types of challenge they faced, accounting for over half of the total challenges reported
(52.1%). Challenges directly related to efficient and timely communication with servicers increased to
account for 36.3% of total challenges. Challenges directly related to obtaining workable mortgage
solutions for homeowners increased slightly to account for 15.7% of total challenges. Challenges related
to homeowner resources and interactions accounted for the same proportion of challenges as they did in
the first quarter (37.4%). Grantees reported that a lack of homeowner preparedness and follow-through
was still the most common individual challenge they faced, and increasing in proportion from the first
quarter to account for 12.9% of total challenges. There was also an increase in the proportion of challenges
of excessive amounts of time homeowners waited to receive a decision on a workout package from
servicers. This challenge, which accounted for 7.8% of challenges in the first quarter, accounted for 12.1%
of challenges in the second quarter.

    Third Quarter (10/1/08 – 12/31/08)
During the third quarter, challenges related to working with servicers were again the most common type
of challenge that Grantees reported, decreasing to account for 45.8% of total challenges reported.
Challenges directly related to efficient and timely communication with servicers accounted for 30.5% of
total challenges. Challenges related to obtaining workable mortgage solutions for homeowners
accounted for 15.3% of total challenges, roughly the same proportion as the previous two quarters.
Grantees reported that challenges related to homeowner resources and interactions rose to account for
40.1% of total challenges reported. Lack of homeowner preparedness and follow-through was the most
commonly reported individual challenge (11.6%). General communication with servicers was the second-
most commonly reported challenge (9.3%). Grantees reported more frequently than in previous quarter
the challenge of homeowners experiencing reduction in income, which accounted for 9% of total
challenges reported during the third quarter.

     Fourth Quarter (1/1/09 – 3/31/09)
During the fourth quarter, Grantees reported the most common challenges they encountered were again
related to working with servicers (47.2%). Challenges related to efficient and timely communication with
servicers accounted for 33.6% of total challenges, and challenges related to obtaining workable mortgage
solutions for homeowners accounted for 13.6% of total challenges. The proportion of reported challenges
related to homeowner resources and interactions was lower than in the past quarters, accounting for 28%
of total challenges. Challenges related to counseling program administration increased significantly to
account for nearly a quarter of total challenges reported (24.8%). Grantees reported that the most
common individual challenge they faced was communicating with servicers (12%). The second-most
commonly reported challenge that Grantees experienced during the fourth quarter was not having
sufficient staff and/or funding to meet the housing counseling demands in their area (11.2%). Lack of


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homeowner preparedness and follow-through was continually challenging, but dropped to the third-
most commonly reported challenge during the fourth quarter (9.6%).

In the fourth quarter, confusion about the Making Home Affordable (MHA) program accounted for 5.6% of
challenges overall. Counselors had difficulty understanding which servicers offer MHA workouts, what
terms those servicers are bound to, and what was required of the homeowner to receive an MHA
workout.




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Client Stories

Randolph and Patricia Bullard, Oakland, California

Randolph and Patricia Bullard are retired grandparents who have been married for 47 years and have
lived in their house since 1969. They live on a fixed income — approximately $1,900 a month combined.
The couple — ages 70 and 67 — refinanced in 2008 with World Savings, into what they thought was a
fixed rate loan. Instead, they received an adjustable rate mortgage with an interest rate at nearly 8%.

“We got a bad loan and couldn’t afford the house note. We didn’t look at the fine print. I learned my
lesson,” Patricia said.

When the mortgage started “doubling up,” they struggled to make payments. Their four children helped
when they could, but “the water bill went up, and the garbage bill went up. With house insurance and
taxes, it was impossible to pay the house note and have anything left to live on,” Patricia said. The house
also lost its value.

Seeking help to modify their loan, Patricia contacted the bank — now Wachovia, who bought World
Savings — and received little assistance. They called companies that charged fees they couldn’t afford.
Despite their record of “always paying the mortgage on time,” the Bullards fell two months behind.

Then somebody suggested they call the National Association of Real Estate Brokers – National
Investment Division (NID), a NFMC Program Grantee. The HUD-Approved Housing Counseling
Intermediary successfully helped them get a lower fixed rate with payments they can afford. Patricia
called the outcome “a blessing.”

“NID was fabulous. All of the counselors were fabulous, very helpful. We didn’t reach the foreclosure
point, but we were very happy to save our house,” she said.


Willard and Gabriella Laster, Pearland, Texas




Willard and Gabriella Laster are the parents of two children and have lived in their house in Texas for
five years. Willard is a police officer, Gabriella worked in the commercial department at JP Morgan
Chase. In February 2008, JP Morgan Chase outsourced its entire commercial department to India.
Gabriella, who had worked at the bank for 10 years, was out of a job.

“I was able to get a severance package, and I was off work for six months. We tried to maintain it up until
July 2008,” Gabriella said.

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But trying to maintain their household on one salary proved to be too much. In August, Gabriella found a
new job as a teacher’s aide in the Pearland School District. Her salary plummeted from $36,000 a year to
$13,000 a year.

“We had to [take the job],” Gabriella explained. “They were the only people who called me back. I had to
start at the bottom.”

In September, Hurricane Ike hit the Gulf Coast region, adding to their hardship. By this time, they were
four months behind in their mortgage. They sought and were granted a forbearance – a delay of
foreclosure that allowed the Lasters to catch up on their payments. In the meantime, their lender,
Countrywide, was bought by Bank of America.

“I tried on my own to talk to the mortgage company to no avail. Time was passing and we were getting
further in arrears. Nobody would help,” Gabriella said.

While watching the local news in February 2009, she learned about an 800 number that she could call for
help. She was referred to Avenue Community Development Corporation in Houston, a NeighborWorks
organization and NFMC Program Grantee.

“Diane called the mortgage company … and kept me updated. Our mortgage went from $2,200 a month
to $1,880 under the [Obama administration’s] Making Home Affordable plan. We were given a three-month
trial period to prove that we could pay $1,880.” In June, after successfully paying their mortgage as
required, the Lasters received the modification documents.

“We were ecstatic,” Gabriella said. “I called Diane, and we were just screaming. I went to her office, and
she helped me fill out the paperwork from A to Z. I knew we could pay it — I just needed to talk to
somebody. I was so excited that I talked to people at my church that had problems with their mortgage. I
gave them Diane’s number. I’ve told three families about the Making Home Affordable plan.”

With their mortgage problem resolved, Gabriella said she’s focused on one pressing thing: her credit.

“I already called the mortgage company for an automatic debit, because I’ve got to get my credit up,” she
said.


Surmontee Morgan, Cleveland, Ohio

Surmontee Morgan calls her family’s struggle to ward off foreclosure “a testimony.” The 49-year-old
teacher from Cleveland, Ohio, remembers 2008 as the year her family “plummeted in a spiral tailwind.”
She now knows firsthand how unforeseen events can jeopardize a family’s livelihood.

Before 2008, Morgan’s household was supported by two healthy incomes. Surmontee taught in the
Cleveland Public School District; her husband was a supervisor at a warehouse. Together, they enjoyed a
comfortable lifestyle and could afford their adjustable rate mortgage of $1,500 a month.

But her husband lost his job at the warehouse, and she was laid off from the school district. Surmontee
began teaching at a charter school at a salary much less than she earned teaching in public schools. The
family survived on her smaller full-time salary. Her husband worked odd jobs.

Surmontee thinks hard-hit industrial cities like Cleveland are particularly affected by the poor economy.

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“Cleveland is a blue-collar town, and there aren’t many places to work when companies shut down,” she
said. With a car note, automobile insurance, personal bills and utilities due — and an adjustable rate
mortgage that was on the rise — the Morgans, who prided themselves on never being behind in their
mortgage, faced foreclosure.

“We missed June, July and August,” Surmontee said. “We were served the [foreclosure] papers at the
beginning of September.”

Not knowing what else to do, Surmontee said the Morgans simply prayed. They learned about a Legal
Aid program and called for help. “The guy there took down all our information. To this day, we don’t
know where he went,” Surmontee said.

A chance encounter, which she attributes to divine intervention, led Surmontee to Neighborhood
Assistance Corporation of America (NACA), a NFMC Program Grantee, and the end of their foreclosure
woes. NACA worked with Saxon Mortgage to reduce the Morgan’s 7.8% interest rate to a 2% rate fixed
for the life of the loan.

“They were very thorough. Now, we pay a little over $700 a month, including taxes and insurance,”
Surmontee said. “This is just what God can do. I’ll shout it from a mountaintop and refer anybody to
NACA who needs the help.”


Sandra Gamez, Winchendon, Massachusetts

Sandra Gamez calls the three-year-old loan on her two-family house in Massachusetts “the worst
mortgage you can imagine.”

Gamez and her husband have a 75/20 loan, which has a 7.7% adjustable rate with a balloon provision on
the first loan and a fixed rate of nearly 13% interest on the second. Gamez insists they didn’t know what
they were signing when they bought the house.

Gamez and her family of five live in one of the units of the two-family house. The other unit is rented.
Gamez and her husband rely on the rental income to help pay the mortgage and other expenses.

 In 2008, a serious of unfortunate events caused economic distress: Gamez lost her job as a social worker;
her husband, who works in the auto industry, saw his overtime hours cut; the tenants fell behind in the
rent and moved out, leaving the unit a shambles requiring costly repairs; and an ice storm in December
froze the pipes, flooding both units. Repairs were estimated at $25,000, and the balloon payment on the
first mortgage was due in six months.

“We tried to get in touch with the bank, but they didn’t want to work with us directly,” Gamez said.

They paid a company $500 a month to help with a loan modification that never materialized. Ultimately,
they fell 14 months behind in their mortgage. Through the Internet, Gamez learned about Twin Cities
Community Development Corporation, a NeighborWorks organization and NFMC Program Grantee.
Two weeks before the foreclosure, a counselor was able to stop the proceedings.

“I don’t have words to describe how I feel,” Gamez said. “They worked with us step by step. We used to
pay almost $1,900, not including taxes. We’re now paying $1,250 at a 4% fixed rate. If we pay continually
for six months, I can get it down to one loan.”

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Gamez said they expect new tenants soon, and she hopes to have a new job as well. “I’m trying to
encourage people to use these services,” Gamez said. “I’ve made referrals to Twin Cities to many
Hispanic homeowners.”


Adam Jaros, Duluth, Minnesota




For 23 years, Adam Jaros was a fundraiser for the Multiple Sclerosis Society. He supervised a staff of 100
in the gaming department ― Minnesota law allows charities to raise money through gambling ― and had
a salary of $69,000 a year. In 2008, the gaming department was shut down, and the 62-year-old Jaros was
without a job. “I wanted to work until I was 65,” he said.

Undeterred and confident, Jaros “rolled up his sleeves” and sought new employment. After a longer-
than-expected search, he found a job with similar responsibilities but at a much reduced salary.

“I went from $69,000 a year to $14,000 a year,” he said. Such a drastic cut was not enough to pay his 30-
year fixed mortgage of $1,036 a month and other living expenses, including raising a 17-year-old son.

“I kept paying the mortgage, and paid whenever I could,” Jaros said. “I took money out of my 401K.” But
he was falling farther behind, and his lender, Chase, threatened to foreclose.

“I was so frustrated that I called so many phone numbers. Companies started calling me, all promising
me things,” Jaros said.

He sought help through Lutheran Social Services, who contacted Chase to modify his loan. “They said if I
made three payments, they would lower my interest rate,” Jaros said. But he fell behind on the payments,
and Chase foreclosed on the house he had owned for five years. A sale date was set for July 2009.

“It was embarrassing,” Jaros explained. “It was in the paper. I said I was not going to give up.”

With the sale date looming, Jaros contacted Minnesota Housing, a NFMC Program Grantee. A counselor
contacted Chase and learned that the bank had incorrect information regarding his income. As a result,
Jaros’ modification payments were reduced. After he makes the next payment which is due September 1,
his interest will be reduced from 9% to a 5% fixed rate. And since he is now 62, he is eligible for a
pension. Jaros is pleased with the outcome.

“I’m smiling now, but I was pretty depressed. I was going through a tough time. I’m happy that Chase
came through,” he said.

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John Kaufman, Springfield, Oregon

Two and a half years ago, John Kaufman quit his job in the construction industry to start a business as a
general contractor. He was married at the time with a 15-year-old son and hoped money from his
retirement account would support him for a year until his new business picked up.

But things didn’t go quite as he’d planned. The construction industry took a hit in the recession, his
marriage broke up, and two salaries that paid the mortgage were reduced to one.

Kaufman said he moved out of the house for six months. During that time, his wife failed to make the
mortgage payments. Kaufman called his lender, Washington Mutual, and was granted a six-month
forbearance — a delay of foreclosure until he could bring his mortgage payments up to date.

“What originally was supposed to be a six-month forbearance turned into a two-year ordeal,” Kaufman
said. “At the end of six months, I didn’t hear from the lender and never got a response. I literally left
hundreds of phone messages. No one would call me back. No one sent paperwork. Because they hadn’t
heard from me, they assumed I had abandoned the house. I got notices saying the house was being
foreclosed and had a sale date. My house had been ready for a foreclosure sale three times in two and a
half years.” Each time the house was about to be foreclosed upon, Kaufman said, he was always able to
get it stopped.

Kaufman said he called the Mortgage Guaranty Insurance Corporation, which was “helpful in the
beginning.” He was “ready to give up, start packing and move,” when a friend recommended Oregon
Housing and Community Services (OHCS), a NFMC Program Grantee.

The counselor was “a joy to deal with,” Kaufman said. “She was always on the phone and following up.”
Kaufman was unable to get the Obama administration’s Making Home Affordable loan that he wanted, but
he did get a loan modification with an interest rate of 2% for one year, with a 1% increase the second year.
After three years, the interest would cap at 5.7%. His $1,000 a month loan is now in good standing.

Kaufman is “very satisfied” with the outcome and said his business, which has a $3,000 to $4,000 a month
growth income, is doing well. His biggest complaint, he said, is the lack of communication between the
lender and the homeowner.

“They need a liaison or someone who can explain the terms of a loan agreement and who follows up,” he
said. “It floors me that there are people out there who are walking away from their homes. But they get so
frustrated.”


Cheryl James, Miami, Florida

Cheryl James is a single mother from Trinidad who works in the compliance department at a Miami
credit union. She has owned her home for eight years, with a mortgage from Ocwen at $1,400 a month. A
recent salary freeze, coupled with a new company requirement that employees pay for their health
insurance premiums, left James with a deficit in income.

“We never used to pay for insurance, and then we had to,” she explained. “I didn’t have extra money. I
was trying to keep up with the mortgage, but I started falling behind. Sometimes I would fall short, and
that would put me two months behind.”

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Eventually, James fell nearly four months behind. Fearing that “time might be against me,” James sought
help. “I tried my best, but it’s better to go for help than to wait for foreclosure,” she said. “You have to act
at the perfect time.”

From a radio ad, she heard about the HOPE NOW Hotline, a NFMC Program Grantee. A counselor
referred her to Centro Campesino Farmworker Center, Inc., a NeighborWorks organization and NFMC
Program Grantee, where a counselor, Shirlynn, assisted her.

“Shirlynn is one of the top people and was very helpful,” James said. “She explained everything. She told
me what to bring, and I tried to have everything she asked for.” With Shirlynn’s help working with
Ocwen, James’s loan was modified from a 7.8% interest rate to a 4.6% rate. She now pays $1,000 a month.

“I can handle that,” she said. “It’s good to know that when you need help, help is out there. I work in the
fraud department, so it’s my job to be cautious. And they explained everything. That’s probably how a lot
of people lose their houses ― they don’t know that help is out there.”


“Evelyn Johnson,”* Kansas City, Missouri * name changed

“Evelyn Johnson” had been in and out of surgery since 2005, the same year she bought her house.
Johnson said she “rushed” to buy the house without looking closely at the terms. She had a conventional
loan with an adjustable rate of 10% that she said would adjust in three years.

The 52-year-old auto assembly worker suffered an injury on the job that required five surgeries. All told,
she was on medical leave for more than two years. She returned to work full time in 2008.

But the job to which she returned had been altered by a recession. Workers’ hours were reduced and
many were being laid off; company benefits and Johnson’s salary were cut.

The reduced salary was not enough for the single parent to make ends meet. The rising mortgage left her
scrambling to “catch up on utility bills.” A poor credit history made refinancing impossible.

Foreclosure proceedings began after several months of missed payments, and a sale date was set.
Desperate, Johnson “researched and kept calling around” until she came across the Greater Kansas City
Housing Information Center (HIC), a NFMC Program Sub-grantee, which is partly funded by the
Missouri Housing Development Commission, a NFMC Program Grantee. HIC secured a forbearance
agreement and a repayment plan with Johnson’s lender, First Franklin.

The counselor “treated my situation like it was her home. She was just that involved. That’s how I knew
she cared,” Johnson said. The terms of the repayment plan required Johnson to pay $864 a month — $500
of the first payment came from HIC. Johnson is convinced that her original mortgage was the result of a
bad loan and the fact that she “didn’t know a whole lot.” But Johnson said she’s not complaining.

“I’m thankful I still have a job,” she said.


Anthony Hilton, Richmond, Virginia

Anthony Hilton is a 47-year-old mail carrier in Richmond, Virginia, a job he has held for 14 years. He has
been a homeowner for 10 years ― his adjustable rate mortgage is nearly 11% ― and his mortgage

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payments were $1,400 a month.

Unlike many homeowners who lost or faced the possibility of losing their jobs and their homes, Hilton
enjoyed security in both. But in 2008, emergency family situations jeopardized that security, resulting in
a struggle to keep his accounts balanced and eventually in past-due mortgage payments. Though he was
delinquent for 30 days, with no threat of foreclosure, Hilton said he wanted to get help before it was too
late.

“I knew what was going on with mortgage loans, and I wanted to save my house. I started to be late all
the time with my payments, and I needed to get a fixed rate,” he said. Hilton was aware of the
NeighborWorks Resource Group, a NeighborWorks organization and NFMC Program Grantee, through
the community, and contacted the organization for a loan modification.

“I asked for help, went through the process and worked with them for a couple of months,” he said. “I
did get a fixed rate ― 5.3% ― and I’m not late anymore,” he said.

Hilton was so pleased with the outcome of his loan that he has recommended NeighborWorks Resource
Group to others. Some expenses still linger ― Hilton said he still has “a lot of extra fees to pay.” But he
recognizes that they are a small price to pay compared to losing his home.


Keith and Jennifer Rose, Seymour, Connecticut

Jennifer Rose describes the circumstances that brought her family to foreclosure as “one financial disaster
after another.” It began when the couple, parents of two small boys, refinanced the loan on the house
they bought in 2003.

“We had an adjustable rate mortgage with Ameriquest. They told us the interest rate was fixed for two
years, but it went up, even when the rates were down. Our interest rate went from 8% to 9.75%,” Jennifer
said. Jennifer added that the couple was “partly at fault,” because they didn’t fully understand the terms
of the loan.

As the interest on the loan increased, their quality of life decreased. Keith was laid off from his job.
Jennifer’s work hours switched to a per diem status, which also impacted their joint income.

“We had car loans, credit card bills. Keith had an accident with the truck, and we had to get a new car. He
got sick and was in the hospital for three days. Our mortgage jumped from $2,138 a month to $2,356 a
month.”

To maintain a good credit rating and to pay the bills on time, the couple borrowed from their 401K
retirement account and tried unsuccessfully to refinance again. A representative who handled the
couple’s refinance loan advised them to stop paying the mortgage. In 2008, they received a letter of
foreclosure. A friend told them about Neighborhood Assistance Corporation of America (NACA), a
NFMC Program Grantee.

“Darren helped us out hugely. He called the lender and was able to get us into a fixed-rate mortgage that
we could afford,” Jennifer said.

The Morgan’s interest rate was reduced to a 3% fixed rate for the life of the loan. They now pay $900 less
per month on their mortgage.


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Keith now works days, and Jennifer, who is pregnant with a baby due in April, works nights. She said
she looks around their “nice middle-class neighborhood” and sees foreclosures — one only “two doors
down” — and realizes how widespread the problem really is.


Curtis Latty, Springfield, Massachusetts

Curtis Latty speaks of his house in Massachusetts as if it’s a beloved member of his family.

“It took a long time to find one at the right price,” he said. “It’s about the most important thing I can think
of in my life. It’s the only thing of value I have. I have an old car and food in the refrigerator, but all my
wealth is in my house. I’ve lived in apartments for years, and I finally found a low-priced house that isn’t
a dump. I’m very concerned about losing it and have no intention of ever selling it.”

Latty bought the house five years ago at a 30-year fixed rate below 8%. The remaining principle balance is
$76,500. So, when he lost his job in a machine shop and fell 30 days behind on the mortgage, he spent a
full year working diligently with a counselor at Springfield Neighborhood Housing Services, a NFMC
Program Grantee trying to get a loan modification and avoid foreclosure.

“This has been such a worrisome thing. You feel like the biggest loser out there when you’re going
through this,” he said.

In 1992, Latty, 56, suffered a serious injury in an automobile accident that left him disabled but still able
to work. Recently, his physician suggested that he apply for Social Security disability benefits ―
something Latty, who had been “trying to make it on his own without it,” had been reluctant to do.

He eventually qualified for a Making Home Affordable modification loan that consisted of a trial period of
three fixed monthly payments that are substantially less than his current mortgage. Bank of America
recently verified that the trial modification has become permanent. Latty hopes the Social Security
benefits, supplemented with a part-time job, will cover the mortgage.




          79 | P a g e         National Foreclosure Mitigation Counseling Program Congressional Update
                                             Program administered by NeighborWorks® America
                                                                                           November 16, 2009
18 lease.
19      NEIGHBORHOOD REINVESTMENT CORPORATION

20     PAYMENT TO THE NEIGHBORHOOD REINVESTMENT.

21                       CORPORATION

22      For payment to the .Neighborhood Reinvestment Cor-
23 poration for use in neighborhood reinvestment activities,
24 as authorized by the Neighborhood Reinvestment Corpora-
25 tion Act (42 U.S.C. 8101-8107), $119,800,000, of which
U:\2008REPT\2008CONF\OMNI\DIVK.OOO                           SEN. APPROP.

                                       162
           1 $5,000,000 shall be for a multi-family rental housing pro-
           2 gram.                                     'c;


           3      For an additional amount, $180,000,000 shall be
           4 made available until expended to the Neighborhood Rein-
           5 vestment Corporation for mortgage foreclosure mitigation
           6 activities, under the following terms and conditions:
           7            (1) The Neighborhood R€investment Corpora-
           8      tion ("NRC"), shall make grants to counseling inter-
           9      mediaries approved by the Department of Housing
          10      and Urban Development (HUD) or the NRC (with
          11      match to be determined by the NRC based on af-
          12      fordability and the economic conditions of an area;
          13       a match also may be waived by the NRC based on
          14      the aforementioned conditions) to provide mortgage
          15      foreclosure mitigation assistance primarily to states
          16      and areas with high rates of defaults and fore-
          17      closures primarily in the sub prime housing market
          18      to help eliminate the default and foreclosure of
          19      mortgages of owner-occupied single-family homes
         20       that are at risk of such foreclosure. Other than
         21       areas with high rates of defaults and foreclosures,
         22       grants may also be provided to approved counseling
         23       intermediaries based on a geographic analysis of the
         24       Nation by the NRC which determines where there is
         25       a prevalence of sub prime mortgages that are risky
U: \200BREPT\200BCONF\OMNI\DIVK.OOO                          SEN. APPROP.

                                       163
           1      and likely to fail, including any trends for mortgages
           2      that are likely to default and face foreclosure. A
           3      State Housing Finance Agency may also be eligible
           4      where the State Housing Finance Agency meets all
           5      the requirements under this paragraph. A HUD- or
           6      NRC-approved counseling intermediary shall meet
           7      certain mortgage foreclosure mitigation assistance
           8      counseling requirements, as determined by the NRC,
           9      and shall be approved by HUD or the NRC as meet-
          10      ing these requirements;
          11           (2) Mortgage foreclosure mitigation assistance
          12      shall only be made available to homeowners of
          13      owner-occupied homes with mortgages in default or
          14      in danger of default. These mortgages shall likely be
          15      subject to a foreclosure action and homeowners will
          16      be provided such assistance that shall consist of ac-
          17      tivities that are likely to prevent foreclosures and re-
          18      suIt in the long-term affordability of the mortgage
          19      retained pursuant to such activity or another posi-
          20      tive outcome for the homeowner. No funds made
          21      available under this paragraph may be provided di-
          22      rectly to lenders or homeowners to discharge. out-
          23      standing mortgage balances or for any other direct
          24      debt reduction payments;
U: \2008REPT\2008CONF\OMNI\DIVK.OOO                         SEN. APPROP.

                                       164
           1           (3) The use of Mortgage Foreclosure Mitigation
           2      Assistance by approved counseling intermediaries
           3      and State Housing Finance Agencies shall involve a
           4      reasonable analysis of the borrower's financial situa-
           5      tion, an evaluation of the current value of the   prop~

           6      erty that is subject to the mortgage, counseling re-
           7      garding the assumption of the mortgage by another
           8      non-federal party, counseling regarding the possible
           9      purchase of the mortgage by a non-federal third
          10      party, counseling and advice of all likely restruc-
          11      turing and refinancing strategies or the approval of
          12      a work-out strategy by all interested parties;
          13           (4) NRC shall award $50,000,000 in mortgage
          14      foreclosure mitigation grants for States and areas
          15      with the greatest needs within 60 days of enactment.
          16      Additional funds may be awarded once the NRCcer-
          17      tifies that HUD- or NRC-approved counseling inter-
          18      mediaries and State Housing Finance Agencies have
          19      the need for additional funds in states and areas·
          20      with high rates of mortgage foreclosures, defaults, or
          21      related activities and the expertise to use these
          22      funds effectively. The NRC may provide up to fif-
          23      teen percent of the total funds under this paragraph
          24      to its own charter members with expertise in fore-
          25      closure prevention counseling, .subject to a certifi-
U:\2008REPT\2008CONF\OMNI\DIVK.OOO                          SEN. APPROP.

                                      165
           1      cation by the NRC that the procedures for selection
           2      do not consist of any procedures o-r activities that
           3      could be construed as an unacceptable conflict of in-
           4      terest or have the appearance of impropriety;
           5           (5) NRC- or HUD-approved counseling entities
           6      and State Housing Finance Agencies receiving funds
           7      under this paragraph shall have demonstrated expe-
           8      rience in successfully working with financial institu-
           9      tions as well as borrowers facing default, delin-
          10      quency and foreclosure as well as documented coun-
          11      seling capacity, outreach capacity, past successful
          12      performance and positive outcomes with documented
          13      counseling plans (including post mortgage fore-
          14      closure mitigation counseling), loan workout agree-
          15      ments and loan modification agreements;
          16          (6) Of the total amount made available under
          17      this paragraph, up to $5,000,000 may be made
          18      available to build the mortgage foreclosure and de-
          19      fault mitigation counseling capacity of counseling
          20      intermediaries through NRC training courses with
         21       HUD- or NRC-approved counseling intermediaries
          22      and their partners, except that private financial in-
          23      stitutions that participate in NRC training shall pay
         24       market rates for such training;
U: \2008REPT\2008CONF\OMNI\DIVKOOO                           SEN. APPROP.

                                       166
           1           (7) Of the total amount made available under
           2      this paragraph, up to 4 percent may; be used for as-
           3      sociated administrative expenses for the NRC to
           4      carry-out activities provided under this section;
           5           (8) Mortgage foreclosure mitigation assistance
           6      may include a budget for outreach and advertising,
           7      as determined by the NRC; and
           8           (9) The NRC shall report bi-annually to the
           9      House and Senate Committees on Appropriations as
          10      well as the Senate Banking Committee and House
          11      Financial Services Committee on its efforts to miti-
          12      gate mortgage default. Such reports shall identify
          13      successful strategies and methods for preserving
          14      homeownership and the long-term affordability of at-
          15      risk mortgages and shall include recommended ef-
          16      forts that will or likely can assist in the success of
          17      this program as well as an analysis of any policy and
          18      procedures that failed to result in successful mort-
          19      gage foreclosure mitigation. The report shall include
          20      an analysis of the details and use of any post   mitiga~

         21       tion counseling of assisted borrowers designed to en-
         22       sure the continued long-term affordability of the
          23      mortgages which were the subject of the mortgage
         24       foreclosure mitigation assistance.
                     Public Law 110-289
              Housing and Economic Recovery Act of 2008

SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

(a) In General- None of the funds made available under this title or title IV
shall be distributed to--
       (1) an organization which has been indicted for a violation under
       Federal law relating to an election for Federal office; or
       (2) an organization which employs applicable individuals.

(b) Applicable Individuals Defined- In this section, the term `applicable
individual' means an individual who--
       (1) is--
              (A) employed by the organization in a permanent or temporary
              capacity;
              (B) contracted or retained by the organization; or
              (C) acting on behalf of, or with the express or apparent
              authority of, the organization; and
       (2) has been indicted for a violation under Federal law relating to an
       election for Federal office.

SEC. 2305. COUNSELING INTERMEDIARIES.

Notwithstanding any other provision of this Act, the amount appropriated
under section 2301(a) of this Act shall be $3,920,000,000 and the amount
appropriated under section 2401 of this Act shall be $180,000,000: Provided,
That of the amount appropriated under section 2401 of this Act pursuant to
this section, not less than 15 percent shall be provided to counseling
organizations that target counseling services regarding loss mitigation to
minority and low-income homeowners or provide such services in
neighborhoods with high concentrations of minority and low-income
homeowners: Provided further, That of amounts appropriated under such
section 2401 $30,000,000 shall be used by the Neighborhood Reinvestment
Corporation (referred to in this section as the `NRC') to make grants to
counseling intermediaries approved by the Department of Housing and Urban
Development or the NRC to hire attorneys to assist homeowners who have
legal issues directly related to the homeowner's foreclosure, delinquency or
short sale. Such attorneys shall be capable of assisting homeowners of
owner-occupied homes with mortgages in default, in danger of default, or
subject to or at risk of foreclosure and who have legal issues that cannot be
handled by counselors already employed by such intermediaries: Provided
further, That of the amounts provided for in the prior provisos the NRC shall
give priority consideration to counseling intermediaries and legal
organizations that (1) provide legal assistance in the 100 metropolitan
statistical areas (as defined by the Director of the Office of Management and
Budget) with the highest home foreclosure rates, and (2) have the capacity
to begin using the financial assistance within 90 days after receipt of the
assistance: Provided further, That no funds provided under this Act shall be
used to provide, obtain, or arrange on behalf of a homeowner, legal
representation involving or for the purposes of civil litigation: Provided
further, That the NRC, in awarding counseling grants under section 2401 of
this Act, may consider, where appropriate, whether the entity has
implemented a written plan for providing in-person counseling and for
making contact, including personal contact, with defaulted mortgagors, for
the purpose of providing counseling or providing information about available
counseling.


TITLE IV--HOUSING COUNSELING RESOURCES

SEC. 2401. HOUSING COUNSELING RESOURCES.

There are appropriated out of any money in the Treasury not otherwise
appropriated for the fiscal year 2008, for an additional amount for the
`Neighborhood Reinvestment Corporation--Payment to the Neighborhood
Reinvestment Corporation' $100,000,000, to remain available until December
31, 2008, for foreclosure mitigation activities under the terms and conditions
contained in the second undesignated paragraph (beginning with the phrase
`For an additional amount') under the heading `Neighborhood Reinvestment
Corporation--Payment to the Neighborhood Reinvestment Corporation' of
Public Law 110-161.

SEC. 2402. CREDIT COUNSELING.

(a) In General- Entities approved by the Neighborhood Reinvestment
Corporation or the Secretary and State housing finance entities receiving
funds under this title shall work to identify and coordinate with non-profit
organizations operating national or statewide toll-free foreclosure prevention
hotlines, including those that--
       (1) serve as a consumer referral source and data repository for
       borrowers experiencing some form of delinquency or foreclosure;
       (2) connect callers with local housing counseling agencies approved by
       the Neighborhood Reinvestment Corporation or the Secretary to assist
       with working out a positive resolution to their mortgage delinquency or
       foreclosure; or
       (3) facilitate or offer free assistance to help homeowners to
       understand their options, negotiate solutions, and find the best
       resolution for their particular circumstances.
OMNIBUS APPROPRIATIONS ACT OF 2009 (P.L. 111-8)

    NEIGHBORHOOD REINVESTMENT CORPORATION

  PAYMENT TO THE NEIGHBORHOOD REINVESTMENT
                 CORPORATION
For payment to the Neighborhood Reinvestment Corporation for
use in neighborhood reinvestment activities, as authorized by H. R.
1105—460 the Neighborhood Reinvestment Corporation Act (42
U.S.C. 8101– 8107), $131,000,000, of which $5,000,000 shall be for a
multi-family rental housing program: Provided, That of the
amounts made available under this heading, $6,000,000 shall be
made available to conduct a consumer mortgage public education
campaign: Provided further, That funding amounts provided under
the previous proviso shall be available for campaign development,
production, and outreach activities.

For an additional amount, $50,000,000 shall be made available until
expended to the Neighborhood Reinvestment Corporation for
mortgage foreclosure mitigation activities, under the following
terms and conditions:

(1) The Neighborhood Reinvestment Corporation (‘‘NRC’’), shall
make grants to counseling intermediaries approved by the
Department of Housing and Urban Development (HUD) (with
match to be determined by the NRC based on affordability and the
economic conditions of an area; a match also may be waived by the
NRC based on the aforementioned conditions) to provide mortgage
foreclosure mitigation assistance primarily to States and areas with
high rates of defaults and foreclosures primarily in the subprime
housing market to help eliminate the default and foreclosure of
mortgages of owner-occupied single-family homes that are at risk of
such foreclosure. Other than areas with high rates of defaults and
foreclosures, grants may also be provided to approved counseling
intermediaries based on a geographic analysis of the Nation by the
NRC which determines where there is a prevalence of subprime
mortgages that are risky and likely to fail, including any trends for
mortgages that are likely to default and face foreclosure.

A State Housing Finance Agency may also be eligible where the
State Housing Finance Agency meets all the requirements under
this paragraph. A HUD-approved counseling intermediary shall
meet certain mortgage foreclosure mitigation assistance counseling
requirements, as determined by the NRC, and shall be approved by
HUD or the NRC as meeting these requirements.

(2) Mortgage foreclosure mitigation assistance shall only be made
available to homeowners of owner-occupied homes with mortgages
in default or in danger of default. These mortgages shall likely be
subject to a foreclosure action and homeowners will be provided
such assistance that shall consist of activities that are likely to
prevent foreclosures and result in the long-term affordability of the
mortgage retained pursuant to such activity or another positive
outcome for the homeowner. No funds made available under this
paragraph may be provided directly to lenders or homeowners to
discharge outstanding mortgage balances or for any other direct
debt reduction payments.

(3) The use of Mortgage Foreclosure Mitigation Assistance by
approved counseling intermediaries and State Housing Finance
Agencies shall involve a reasonable analysis of the borrower’s
financial situation, an evaluation of the current value of the
property that is subject to the mortgage, counseling regarding the
assumption of the mortgage by another non-Federal party,
counseling regarding the possible purchase of the mortgage by a
non-Federal third party, counseling and H. R. 1105—461 advice of
all likely restructuring and refinancing strategies or the approval of
a work-out strategy by all interested parties.

(4) NRC may provide up to 15 percent of the total funds under this
paragraph to its own charter members with expertise in foreclosure
prevention counseling, subject to a certification by the NRC that
the procedures for selection do not consist of any procedures or
activities that could be construed as an unacceptable conflict of
interest or have the appearance of impropriety.

(5) HUD-approved counseling entities and State Housing Finance
Agencies receiving funds under this paragraph shall have
demonstrated experience in successfully working with financial
institutions as well as borrowers facing default, delinquency and
foreclosure as well as documented counseling capacity, outreach
capacity, past successful performance and positive outcomes with
documented counseling plans (including post mortgage foreclosure
mitigation counseling), loan workout agreements and loan
modification agreements. NRC may use other criteria to
demonstrate capacity in underserved areas.
(6) Of the total amount made available under this paragraph, up to
$5,000,000 may be made available to build the mortgage foreclosure
and default mitigation counseling capacity of counseling
intermediaries through NRC training courses with HUD-approved
counseling intermediaries and their partners, except that private
financial institutions that participate in NRC training shall pay
market rates for such training.

(7) Of the total amount made available under this paragraph, up to
4 percent may be used for associated administrative expenses for
the NRC to carry out activities provided under this section.

(8) Mortgage foreclosure mitigation assistance grants may include a
budget for outreach and advertising, and training, as determined by
the NRC.

(9) The NRC shall report bi-annually to the House and Senate
Committees on Appropriations as well as the Senate Banking
Committee and House Financial Services Committee on its efforts
to mitigate mortgage default. Such reports shall identify successful
strategies and methods for preserving homeownership and the long-
term affordability of at-risk mortgages and shall include
recommended efforts that will or likely can assist in the success of
this program as well as an analysis of any policy and procedures
that failed to result in successful mortgage foreclosure mitigation.
The report shall include an analysis of the details and use of any
post mitigation counseling of assisted borrowers designed to ensure
the continued longterm affordability of the mortgages which were
the subject of the mortgage foreclosure mitigation assistance.
                   NFMC ROUND 2 COUNSELING AWARDS BY STATE
         Please note that all awards are contingent upon the execution of a Grant Agreement



                                                                                   Total Awarded 
         Organization                                              State 
                                                                               Counseling Amount 

HUD‐APPROVED HOUSING COUNSELING INTERMEDIARIES 
                                                                                               $   
     1  ACORN HOUSING CORPORATION                             National                16,000,000 
                                                                                               $   
     2  CATHOLIC CHARITIES USA                                National                   873,750 
                                                                                               $   
     3  HOMEFREE - U S A                                      National                 5,687,630 
                                                                                               $   
     4  HOMEOWNERSHIP PRESERVATION FOUNDATION                 National                16,000,000 
                                                                                               $   
     5  HOUSING PARTNERSHIP NETWORK                           National                 5,074,500 
                                                                                               $   
     6  MISSION OF PEACE                                      National                 5,079,810 
                                                                                               $   
     7  MONEY MANAGEMENT INTERNATIONAL INC.                   National                16,000,000 
        NEIGHBORHOOD ASSISTANCE CORPORATION OF                                                 $   
     8  AMERICA                                               National                16,000,000 
        NATIONAL ASSOCIATION OF REAL ESTATE BROKERS-                                           $   
     9  INVESTMENT DIVISION, INC                              National                 7,807,810 
                                                                                               $   
10  NATIONAL COMMUNITY REINVESTMENT COALITION                 National                 1,618,840 
                                                                                               $   
11  NATIONAL COUNCIL OF LA RAZA                               National                 1,315,690 
    NATIONAL FOUNDATION FOR CREDIT COUNSELING,                                                 $   
12  INC.                                                      National                16,000,000 
                                                                                               $   
13  NATIONAL URBAN LEAGUE                                     National                 5,311,500 
    STRUCTURED EMPLOYMENT ECONOMIC                                                             $   
14  DEVELOPMENT CO                                            National                 1,304,250 
    WEST TENNESSEE LEGAL SERVICES,                                                             $   
15  INCORPORATED                                              National                 1,956,380 
                                                                                                 
                                                                                               $   
                                                                  SUBTOTAL:          116,030,160 
                                                                                                 
                                                                                               $   
                                                                  AVERAGE:             7,735,344 
          
          
          
                                                                                                  
                                                                               Total Awarded 
     Organization                                           State 
                                                                           Counseling Amount 

STATE HOUSING FINANCE AGENCIES 
    Arizona Department of Housing/Arizona Housing Finance                                   $   
 1  Authority                                                    AZ                  533,060 
                                                                                            $   
 2  California Housing Finance Agency                            CA                7,377,050 
                                                                                            $   
 3  Colorado Housing and Finance Authority                       CO                1,719,940 
                                                                                            $   
 4  Connecticut Housing Finance Authority                            CT              681,230 
                                                                                            $   
 5  Delaware State Housing Authority                             DE                  203,050 
                                                                                            $   
 6  Florida Housing Finance Corporation                              FL            2,294,700 
                                                                                            $   
 7  Georgia Department of Community Affairs                      GA                  940,690 
                                                                                            $   
 8  Hawaii Housing Finance and Development Corporation               HI              298,470 
                                                                                            $   
 9  Iowa Finance Authority                                           IA              651,750 
                                                                                            $   
10  Idaho Housing and Finance Association                            ID              135,510 
                                                                                            $   
11  Illinois Housing Development Authority                           IL            3,084,940 
                                                                                            $   
12  Indiana Housing and Community Development Authority              IN              638,250 
                                                                                            $   
13  Kentucky Housing Corporation                                     KY            1,279,020 
                                                                                            $   
14  Louisiana Housing Finance Agency                                 LA              201,660 
                                                                                            $   
15  MassHousing                                                 MA                   407,340 
    Maryland Department of Housing and Community                                            $   
16  Development                                                 MD                 1,391,260 
                                                                                            $   
17  Michigan State Housing Development Authority                 MI                3,060,730 
                                                                                            $   
18  Minnesota Housing                                           MN                 4,041,560 
                                                                                            $   
19  Montana Board of Housing/Housing Division                    MT                  276,000 
                                                                                            $   
20  North Carolina Housing Finance Agency                        NC                1,897,200 
                                                                                            $   
21  Nebraska Investment Finance Authority                        NE                  233,390 
                                                                                            $   
22  New Jersey Housing and Mortgage Finance Agency                   NJ              244,210 
                                                                                            $   
23  New Mexico Mortgage Finance Authority                       NM                    52,500 
24  Nevada Housing Division                                      NV                         $   
                                                                                        349,880 
    State of New York Mortgage Agency/New York State                                          $   
25  Housing Finance Agency                                          NY                1,295,660 
                                                                                              $   
26  Ohio Housing Finance Agency                                     OH                2,522,440 
                                                                                              $   
27  Oregon Housing and Community Services                           OR                   91,500 
                                                                                              $   
28  Pennsylvania Housing Finance Agency                             PA                8,786,440 
                                                                                              $   
29  Rhode Island Housing                                             RI                 876,380 
                                                                                              $   
30  South Dakota Housing Development Authority                      SD                   93,780 
                                                                                              $   
31  Tennessee Housing Development Agency                            TN                  735,190 
                                                                                              $   
32  Texas Department of Housing and Community Affairs               TX                  491,490 
                                                                                              $   
33  Virginia Housing Development Authority                          VA                  206,090 
                                                                                              $   
34  Washington State Housing Finance Commission                    WA                   628,880 
                                                                                              $   
35  Wisconsin Housing and Economic Development Authority            WI                  173,630 
                                                                                                
                                                                                              $   
                                                             SUBTOTAL:               47,894,870 
                                                                                                
                                                                                              $   
                                                             AVERAGE:                 1,368,425 
                                                                                                 
                                                                                  Total Awarded 
        Organization                                              State 
                                                                              Counseling Amount 
NEIGHBORWORKS ORGANIZATIONS 
                                                                                              $   
     1  Community Service Programs of West Alabama, Inc.            AL                   31,680 
                                                                                              $   
     2  Neighborhood Housing Services of Birmingham, Inc.           AL                   57,600 
                                                                                                
                                                                                              $   
     3  Neighborhood Housing Services of Phoenix, Inc.             AZ                   260,820 
                                                                                              $   
     4  The Primavera Foundation, Inc                              AZ                   105,840 
                                                                                                
                                                                                              $   
     5  Cabrillo Economic Development Corp.                        CA                   431,640 
                                                                                              $   
     6  Coachella Valley Housing Coalition                         CA                    19,440 
        Community Housing Development Corporation of North                                    $   
     7  Richmond                                                   CA                   208,800 
                                                                                              $   
     8  Community HousingWorks                                     CA                   578,880 
                                                                            $   
 9  Los Angeles Neighborhood Housing Services, Inc.            CA    598,680 
                                                                            $   
10  Neighborhood Housing Services of Orange County, Inc.       CA    342,000 
                                                                            $   
11  Neighborhood Housing Services of the Inland Empire, Inc.   CA    214,380 
                                                                            $   
12  Neighborhood Housing Services Silicon Valley               CA    558,360 
                                                                            $   
13  Neighborhood Partnership Housing Services                  CA     88,200 
    NeighborWorks HomeOwnership Center Sacramento                           $   
14  Region                                                     CA    306,900 
                                                                            $   
15  Sacramento Mutual Housing Association, Inc.                CA     28,980 
                                                                            $   
16  Self-Help Enterprises                                      CA     60,150 
                                                                            $   
17  The Unity Council                                          CA    142,020 
                                                                              
                                                                            $   
18  Colorado Rural Housing Development Corporation             CO    147,960 
                                                                            $   
19  Neighbor to Neighbor, Inc.                                 CO     48,940 
                                                                            $   
20  NeighborWorks of Pueblo                                    CO     75,240 
                                                                              
                                                                            $   
21  Neighborhood Housing Services of New Haven, Inc.           CT    176,220 
                                                                              
    Marshall Heights Community Development Organization,                    $   
22  Inc.                                                       DC     90,720 
                                                                              
    National Council on Agricultural Life and Labor Research                $   
23  Fund, Inc.                                                 DE     34,380 
                                                                              
                                                                            $   
24  Centro Campesino Farmworker Center, Inc.                   FL    144,000 
                                                                            $   
25  Corporation to Develop Communities of Tampa                FL    108,900 
                                                                            $   
26  Housing Partnership, Inc.                                  FL     52,200 
                                                                            $   
27  Neighborhood Housing & Development Corporation             FL     11,700 
                                                                            $   
28  Neighborhood Housing Services of South Florida, Inc.       FL    475,200 
                                                                              
                                                                            $   
29  Cobb Housing, Inc.                                         GA    164,700 
                                                                            $   
30  NeighborWorks Columbus (GA)                                GA     45,360 
                                                                            $   
31  Reynoldstown Revitalization Corporation                    GA    130,320 
                                                                              
                                                                          $   
32  Neighborhood Finance Corporation                          IA     10,620 
                                                                            
                                                                          $   
33  Mid Central Community Action                              IL     27,180 
                                                                          $   
34  Neighborhood Housing Services of Chicago, Inc.            IL    576,360 
                                                                            
                                                                          $   
35  LaCasa, Inc.                                              IN     92,340 
                                                                            
                                                                          $   
36  Community Ventures Corporation                           KY     229,320 
                                                                            
                                                                          $   
37  Coalition for a Better Acre                              MA      94,140 
                                                                          $   
38  Lawrence CommunityWorks, Inc.                            MA      70,560 
                                                                          $   
39  Neighborhood Housing Services of the South Shore, Inc.   MA     200,700 
                                                                          $   
40  Neighborhood of Affordable Housing, Inc.                 MA     187,200 
                                                                          $   
41  Nuestra Comunidad Development Corp.                      MA      40,500 
                                                                          $   
42  Springfield Neighborhood Housing Services, Inc.          MA     113,940 
                                                                          $   
43  Twin Cities Community Development Corp.                  MA      56,700 
                                                                          $   
44  Urban Edge Housing Corporation                           MA     113,000 
                                                                            
                                                                          $   
45  Kalamazoo Neighborhood Housing Services, Inc.            MI      77,400 
                                                                          $   
46  Neighborhoods Inc. of Battle Creek                       MI     106,380 
                                                                            
                                                                          $   
47  Neighborhood Housing Services of Duluth, Inc.            MN      10,080 
                                                                            
    Beyond Housing / Neighborhood Housing Services of St.                 $   
48  Louis                                                    MO     456,840 
                                                                          $   
49  Neighborhood Housing Services of Kansas City, Inc.       MO      74,300 
                                                                          $   
50  North East Community Action Corporation                  MO     144,180 
                                                                            
                                                                          $   
51  Affordable Housing Education and Development, Inc.       NH      57,600 
                                                                            
                                                                          $   
52  Brand New Day, Inc.                                      NJ      39,780 
                                                                            
                                                                              $   
53  Tierra del Sol Housing Corporation                         NM        10,800 
                                                                                
                                                                              $   
54  Neighborhood Housing Services of Southern Nevada, Inc.     NV       111,600 
                                                                                
    Chautauqua Home Rehabilitation and Improvement                            $   
55  Corporation                                                NY        10,260 
                                                                              $   
56  Community Development Corporation of Long Island, Inc.     NY        94,140 
                                                                              $   
57  Home HeadQuarters, Inc.                                    NY        63,170 
                                                                              $   
58  Hudson River Housing, Inc.                                 NY        57,700 
                                                                              $   
59  Neighborhood Housing Services of New York City, Inc.       NY       317,520 
                                                                              $   
60  Opportunities for Chenango, Inc.                           NY        21,420 
                                                                              $   
61  Troy Rehabilitation & Improvement Program, Inc.            NY        18,360 
                                                                                
                                                                              $   
62  Home Ownership Center of Greater Cincinnati, Inc., The     OH       450,000 
                                                                              $   
63  Neighborhood Development Services                          OH       172,800 
    Neighborhood Housing Partnership of Greater Springfield,                  $   
64  Inc.                                                       OH       155,880 
                                                                              $   
65  Neighborhood Housing Services of Greater Cleveland, Inc.   OH       532,800 
                                                                              $   
66  Neighborhood Housing Services of Hamilton, Inc.            OH        60,040 
                                                                              $   
67  St. Mary Development Corporation                           OH       570,780 
                                                                                
                                                                              $   
68  Neighborhood Housing Services of Oklahoma City, Inc.       OK        79,200 
                                                                                
                                                                              $   
69  Neighborhood Housing Services of Lackawanna County         PA        40,500 
                                                                                
                                                                              $   
70  San Juan Neighborhood Housing Services, Inc.               PR       114,840 
                                                                                
                                                                              $   
71  West Elmwood Housing Development Corp.                      RI       86,400 
                                                                                
                                                                              $   
72  Family Services, Inc.                                      SC     1,364,220 
                                                                                
                                                                              $   
73  Avenue Community Development Corporation                   TX        10,080 
                                                                              $   
74  BCL of Texas                                               TX       130,860 
                                                                              $   
75  Laredo-Webb Neighborhood Housing Services, Inc.          TX         45,900 
                                                                              $   
76  NeighborWorks Waco                                       TX         49,680 
                                                                                
                                                                              $   
77  NeighborWorks Resource Group                             VA         38,160 
                                                                                
                                                                              $   
78  Gilman Housing Trust, Inc.                               VT         33,300 
                                                                              $   
79  NeighborWorks of Western Vermont                         VT         24,120 
                                                                              $   
80  Rockingham Area Community Land Trust, Inc.               VT         27,900 
                                                                                
                                                                              $   
81  Housing Resources, Inc.                                  WI        116,100 
                                                                              $   
82  Neighborhood Housing Services of Beloit, Inc.            WI         41,040 
                                                                              $   
83  NeighborWorks Green Bay                                  WI         51,300 
                                                                              $   
84  Select Milwaukee, Inc.                                   WI        176,940 
                                                                                
                                                                              $   
                                                      SUBTOTAL:     13,597,140 
                                                                                
                                                                              $   
                                                      AVERAGE:         161,871 
                                                                               
                                                         GRAND               $   
                                                         TOTAL:    177,522,170 
                                  NFMC Round 2 Legal Assistance Awards, December 3, 2008
                            Note: all awards are contingent until Grant Agreements are fully-executed.

                                                                                                               Total Awarded 
                                           Organization                                            State      Legal Assistance 
                                                                                                                  Amount
HUD‐APPROVED HOUSING COUNSELING INTERMEDIARIES
 1   ACORN HOUSING CORPORATION                                                                     National      $1,200,000.00
 2   HOMEFREE - U S A                                                                              National      $1,200,000.00
 3   NEIGHBORHOOD ASSISTANCE CORPORATION OF AMERICA                                                National      $3,496,500.00
 4   NATIONAL ASSOCIATION OF REAL ESTATE BROKERS-INVESTMENT DIVISION, INC                          National       $600,000.00
 5   NATIONAL FOUNDATION FOR CREDIT COUNSELING, INC.                                               National      $1,346,035.00
 6   WEST TENNESSEE LEGAL SERVICES, INCORPORATED                                                   National      $2,224,375.00



                                                                                                  SUBTOTAL:    $10,066,910.00

                                                                                                   AVERAGE:      $1,677,818.33

                                                                                                               Total Awarded 
                                           Organization                                            State      Legal Assistance 
                                                                                                                  Amount
STATE HOUSING FINANCE AGENCIES
 1   Arizona Department of Housing/Arizona Housing Finance Authority                               AZ             $150,000.00
 2   California Housing Finance Agency                                                             CA             $405,500.00
 3   Delaware State Housing Authority                                                              DE               $10,000.00
 4   Florida Housing Finance Corporation                                                           FL            $1,545,000.00
 5   Georgia Department of Community Affairs                                                       GA             $500,000.00
 6   Hawaii Housing Finance and Development Corporation                                            HI             $100,000.00
 7   Idaho Housing and Finance Association                                                         ID               $40,000.00
 8   Illinois Housing Development Authority                                                        IL             $100,000.00
 9   Indiana Housing and Community Development Authority                                           IN               $55,000.00
10   Kentucky Housing Corporation                                                                  KY             $300,000.00
11   Maryland Department of Housing and Community Development                                      MD             $500,000.00
12   Michigan State Housing Development Authority                                                  MI             $617,646.00
13   Minnesota Housing                                                                             MN             $418,950.00
14   Montana Board of Housing/Housing Division                                                     MT             $125,000.00
15   North Carolina Housing Finance Agency                                                         NC             $600,000.00
16   New Jersey Housing and Mortgage Finance Agency                                                NJ               $75,000.00
17   New Mexico Mortgage Finance Authority                                                         NM               $65,000.00
18   State of New York Mortgage Agency/New York State Housing Finance Agency                       NY             $186,410.00
19   Ohio Housing Finance Agency                                                                   OH            $1,925,000.00
20   Oregon Housing and Community Services                                                         OR             $141,250.00
21   Pennsylvania Housing Finance Agency                                                           PA            $2,079,300.00
22   Tennessee Housing Development Agency                                                          TN               $25,000.00
23   Wisconsin Housing and Economic Development Authority                                          WI             $175,000.00

                                                                                                  SUBTOTAL:    $10,139,056.00

                                                                                                   AVERAGE:       $440,828.52
                                    NFMC Round 2 Legal Assistance Awards, December 3, 2008
                              Note: all awards are contingent until Grant Agreements are fully-executed.

                                                                                                                 Total Awarded 
                                             Organization                                            State      Legal Assistance 
                                                                                                                    Amount
NEIGHBORWORKS ORGANIZATIONS
 1 Community Service Programs of West Alabama, Inc.                                                  AL               $27,300.00
 2 Neighborhood Housing Services of Phoenix, Inc.                                                    AZ               $10,000.00
 3 The Primavera Foundation, Inc                                                                     AZ               $78,750.00
 4   Community Housing Development Corporation of North Richmond                                     CA              $118,890.00
 5   Los Angeles Neighborhood Housing Services, Inc.                                                 CA              $600,000.00
 6   Neighborhood Housing Services of Orange County, Inc.                                            CA              $241,500.00
 7   NeighborWorks HomeOwnership Center Sacramento Region                                            CA              $200,000.00
 8   Self-Help Enterprises                                                                           CA              $100,000.00
 9   The Unity Council                                                                               CA              $250,000.00
10 Neighborhood Housing Services of New Haven, Inc.                                                  CT               $26,316.00
11 Neighborhood Housing Services of South Florida, Inc.                                              FL              $150,000.00

12 NeighborWorks Columbus (GA)                                                                       GA               $42,525.00
13 Mid Central Community Action                                                                      IL               $11,500.00
14 Community Ventures Corporation                                                                    KY              $201,600.00
15 Twin Cities Community Development Corp.                                                           MA               $18,000.00
16 Urban Edge Housing Corporation                                                                    MA               $25,000.00
17 North East Community Action Corporation                                                           MO              $100,000.00
18 Neighborhood Housing Services of New York City, Inc.                                              NY               $60,000.00
19 Troy Rehabilitation & Improvement Program, Inc.                                                   NY                $9,575.00
20   Home Ownership Center of Greater Cincinnati, Inc., The                                          OH              $500,000.00
21   Neighborhood Development Services                                                               OH               $40,000.00
22   Neighborhood Housing Services of Greater Cleveland, Inc.                                        OH              $100,000.00
23   St. Mary Development Corporation                                                                OH              $240,000.00
24   Neighborhood Housing Services of Oklahoma City, Inc.                                            OK                $6,000.00
25 Family Services, Inc.                                                                             SC            $1,741,425.00

                                                                                                    SUBTOTAL:      $4,898,381.00

                                                                                                     AVERAGE:       $195,935.24

                                                                                                GRAND TOTAL:     $25,104,347.00
                                NFMC ROUND 3 COUNSELING AWARDS BY STATE
              Please note that all awards are contingent upon the execution of a Grant Agreement
                                                                                            Total Award  
                                Organization                                 State
                                                                                              Amount
HUD‐APPROVED HOUSING COUNSELING INTERMEDIARIES
1    CATHOLIC CHARITIES USA                                                 National                         85,150
                                                                                        $                     
2    CLEARPOINT FINANCIAL SOLUTIONS, INC.                                   National    $               1,291,780
     CONSUMER CREDIT COUNSELING SERVICES OF GREATER ATLANTA, 
3                                                                           National    $               3,500,000
     INC.
4    HOMEFREE ‐ U S A                                                       National    $               3,500,000
5    HOMEOWNERSHIP PRESERVATION FOUNDATION                                  National    $               3,500,000
6    HOUSING PARTNERSHIP NETWORK                                            National    $                  449,770
7    MISSION OF PEACE                                                       National    $               2,672,330
8    MONEY MANAGEMENT INTERNATIONAL INC.                                    National    $               1,951,290
9    NACA                                                                   National    $               3,500,000
     NATIONAL ASSOCIATION OF REAL ESTATE BROKERS‐INVESTMENT 
10                                                                          National    $               1,879,850
     DIVISION, INC
11 NATIONAL COMMUNITY REINVESTMENT COALITION                                National                         63,820
                                                                                        $                     
12 NATIONAL COUNCIL OF LA RAZA                                              National    $               1,274,250
13 NATIONAL FOUNDATION FOR CREDIT COUNSELING, INC.                          National    $               3,500,000
14 NATIONAL URBAN LEAGUE                                                    National    $                  134,110
15 WEST TENNESSEE LEGAL SERVICES, INCORPORATED                              National                         93,540
                                                                                        $                     

                                                                         SUBTOTAL       $            27,395,890
                                                                         AVERAGE        $               1,826,393

                                                                                            Total Award 
                                Organization                                 State
                                                                                              Amount
STATE HOUSING FINANCE AGENCIES
1    Arizona Department of Housing/Arizona Housing Finance Authority           AZ       $                  569,790
2    Connecticut Housing Finance Authority                                     CT                            85,150
                                                                                        $                     
3    Delaware State Housing Authority                                         DE                             85,150
                                                                                        $                     
4    Florida Housing Finance Corporation                                       FL       $               1,805,370
5    Georgia Department of Community Affairs                                  GA                             85,150
                                                                                        $                     
6    Hawaii Housing Finance and Development Corporation                        HI       $                  113,540
7    Idaho Housing and Finance Association                                     ID       $                  145,730
8    Illinois Housing Development Authority                                    IL       $               1,394,270
9    Iowa Finance Authority                                                    IN       $                  280,420
10 Kentucky Housing Corporation                                                KY                            85,150
                                                                                        $                     
11 Louisiana Housing Finance Agency                                            LA                            85,150
                                                                                        $                     
12 Maryland Department of Housing and Community Development                   MD                             85,150
                                                                                        $                     
13 Michigan State Housing Development Authority                               MI                             85,150
                                                                                        $                     
                               NFMC ROUND 3 COUNSELING AWARDS BY STATE
             Please note that all awards are contingent upon the execution of a Grant Agreement
14 Minnesota Housing                                                         MN        $                  864,300
15 Mississippi Home Corporation                                              MS                             85,150
                                                                                       $                     
16 Montana Board of Housing/Housing Division                                 MT        $                  133,160
17 Nevada Housing Division                                                   NV                             85,150
                                                                                       $                     
18 North Carolina Housing Finance Agency                                     NC        $                  895,350
19 Ohio Housing Finance Agency                                               OH        $               1,290,070
20 Oregon Housing and Community Services                                     OR        $                  457,390
21 Pennsylvania Housing Finance Agency                                        PA       $               2,230,370
22 Rhode Island Housing                                                       RI       $                  362,330
23 South Dakota Housing Development Authority                                 SD                            85,150
                                                                                       $                     
24 State of New York Mortgage Agency/New York State Housing Finance A        NY        $                  685,610
25 Tennessee Housing Development Agency                                      TN        $                  441,200
26 Texas Department of Housing and Community Affairs                          TX       $                  449,960
27 Washington State Housing Finance Commission                               WA                             85,150
                                                                                       $                     

                                                                        SUBTOTAL       $            13,055,510
                                                                        AVERAGE        $                  483,537

                                                                                           Total Award 
                                Organization                                State
                                                                                             Amount
NIEGHBORWORKS ORGANIZATIONS
1   Community Service Programs of West Alabama, Inc.                          AL                            26,640
                                                                                       $                     
2   Neighborhood Housing Services of Birmingham, Inc.                         AL                            47,880
                                                                                       $                     


3   Neighborhood Housing Services of Phoenix, Inc.                            AZ       $                  123,660
4   The Primavera Foundation, Inc                                             AZ       $                  113,400


5   Cabrillo Economic Development Corp.                                      CA        $                  230,760
6   Community HousingWorks                                                   CA        $                  316,620
7   Los Angeles Neighborhood Housing Services, Inc.                          CA        $                  769,140
8   Neighborhood Housing Services of Orange County, Inc.                     CA        $                  214,740
9   Neighborhood Housing Services of the Inland Empire, Inc.                 CA        $                  105,300
10 Neighborhood Housing Services Silicon Valley                              CA                             26,640
                                                                                       $                     
11 Neighborhood Partnership Housing Services                                 CA        $                  127,440
12 NeighborWorks HomeOwnership Center Sacramento Region                      CA        $                  112,320
13 Self‐Help Enterprises                                                     CA                             72,900
                                                                                       $                     


14 Colorado Rural Housing Development Corporation                            CO                             38,520
                                                                                       $                     
15 Neighbor to Neighbor, Inc.                                                CO                             32,220
                                                                                       $                     
16 NeighborWorks of Pueblo                                                   CO                             30,600
                                                                                       $                     
                               NFMC ROUND 3 COUNSELING AWARDS BY STATE
             Please note that all awards are contingent upon the execution of a Grant Agreement
17 Tri‐County Housing & Community Development Corporation                    CO                             26,640
                                                                                       $                     


18 Neighborhood Housing Services of New Haven, Inc.                           CT       $                  118,800


19 National Council on Agricultural Life and Labor Research Fund, Inc.       DE        $                  102,420


20 Centro Campesino Farmworker Center, Inc.                                   FL                            26,640
                                                                                       $                     
21 Corporation to Develop Communities of Tampa                                FL                            95,580
                                                                                       $                     
22 Housing Partnership, Inc.                                                  FL                            26,820
                                                                                       $                     
23 Neighborhood Housing & Development Corporation                             FL                            26,640
                                                                                       $                     
24 Neighborhood Housing Services of South Florida, Inc.                       FL       $                  305,100


25 Cobb Housing, Inc.                                                        GA                             57,960
                                                                                       $                     
26 NeighborWorks Columbus (GA)                                               GA                             26,640
                                                                                       $                     
27 Resources for Residents and Communities of Georgia, Inc.                  GA                             26,640
                                                                                       $                     


28 Neighborhood Housing Services, Inc.                                        ID                            76,680
                                                                                       $                     


29 Mid Central Community Action                                               IL                            26,640
                                                                                       $                     
30 Neighborhood Housing Services of Chicago, Inc.                             IL       $                  158,040


31 Community Housing Services of Wichita/Sedgwick County                      KS                            26,640
                                                                                       $                     


32 Community Ventures Corporation                                             KY                            26,640
                                                                                       $                     


33 Coalition for a Better Acre                                               MA                             26,640
                                                                                       $                     
34 Lawrence CommunityWorks, Inc.                                             MA                             36,900
                                                                                       $                     
35 Neighborhood Housing Services of the South Shore, Inc.                    MA                             90,360
                                                                                       $                     
36 Neighborhood of Affordable Housing, Inc.                                  MA        $                  142,020
37 Oak Hill Community Development Corp.                                      MA                             42,840
                                                                                       $                     
38 Springfield Neighborhood Housing Services, Inc.                           MA                             26,640
                                                                                       $                     
39 Twin Cities Community Development Corp.                                   MA                             56,520
                                                                                       $                     
40 Urban Edge Housing Corporation                                            MA                             84,960
                                                                                       $                     


41 Neighborhood Housing Services of Baltimore, Inc.                          MD                             26,640
                                                                                       $                     
42 Salisbury Neighborhood Housing Services, Inc.                             MD                             26,640
                                                                                       $                     


43 Kalamazoo Neighborhood Housing Services, Inc.                             MI                             30,780
                                                                                       $                     
44 Neighborhoods Inc. of Battle Creek                                        MI                             27,900
                                                                                       $                     
                               NFMC ROUND 3 COUNSELING AWARDS BY STATE
             Please note that all awards are contingent upon the execution of a Grant Agreement
45 Southwest Solutions                                                       MI        $                  255,780


46 Beyond Housing / Neighborhood Housing Services of St. Louis               MO        $                  104,040


47 Affordable Housing Education and Development, Inc.                        NH                             37,800
                                                                                       $                     
48 NeighborWorks Greater Manchester                                          NH                             26,640
                                                                                       $                     


49 Brand New Day, Inc.                                                        NJ                            26,640
                                                                                       $                     


50 Neighborhood Housing Services of Southern Nevada, Inc.                    NV                             49,140
                                                                                       $                     


51 Asian Americans for Equality, Inc.                                        NY                             54,900
                                                                                       $                     
52 Chautauqua Home Rehabilitation and Improvement Corporation                NY                             26,640
                                                                                       $                     
53 Community Development Corporation of Long Island, Inc.                    NY                             60,120
                                                                                       $                     
54 Hudson River Housing, Inc.                                                NY                             58,320
                                                                                       $                     
55 Neighborhood Housing Services of New York City, Inc.                      NY        $                  248,760
56 Rural Ulster Preservation Company, Inc.                                   NY                             83,880
                                                                                       $                     
57 UNHS NeighborWorks HomeOwnership Center                                   NY                             26,640
                                                                                       $                     


58 Home Ownership Center of Greater Cincinnati, Inc., The                    OH        $                  399,960
59 Neighborhood Development Services                                         OH        $                  164,160
60 Neighborhood Housing Partnership of Greater Springfield, Inc.             OH                             93,060
                                                                                       $                     
61 Neighborhood Housing Services of Greater Cleveland, Inc.                  OH        $                  102,780
62 Neighborhood Housing Services of Hamilton, Inc.                           OH                             45,540
                                                                                       $                     
63 St. Mary Development Corporation                                          OH        $                  335,880

64 Neighborhood Housing Services of Oklahoma City, Inc.                      OK                             26,640
                                                                                       $                     

65 San Juan Neighborhood Housing Services, Inc.                               PR                            58,320
                                                                                       $                     

66 West Elmwood Housing Development Corp.                                     RI                            79,380
                                                                                       $                     

67 Family Services, Inc.                                                      SC       $                  774,900

68 Avenue Community Development Corporation                                   TX                            26,640
                                                                                       $                     
69 BCL of Texas                                                               TX                            26,640
                                                                                       $                     
70 NeighborWorks Waco                                                         TX                            26,640
                                                                                       $                     

71 NeighborWorks Resource Group                                              VA                             26,640
                                                                                       $                     

72 Champlain Housing Trust                                                    VT                            31,500
                                                                                       $                     
73 Gilman Housing Trust, Inc.                                                 VT                            26,640
                                                                                       $                     
                                NFMC ROUND 3 COUNSELING AWARDS BY STATE
              Please note that all awards are contingent upon the execution of a Grant Agreement
74 NeighborWorks of Western Vermont                                            VT                            26,640
                                                                                        $                     
75 Rockingham Area Community Land Trust, Inc.                                  VT                            26,640
                                                                                        $                     

76   Housing Resources, Inc.                                                  WI        $                  113,760
77   Neighborhood Housing Services of Beloit, Inc.                            WI                             26,640
                                                                                        $                     
78   Neighborhood Housing Services of Richland County, Inc.                   WI                             26,640
                                                                                        $                     
79   NeighborWorks Green Bay                                                  WI                             33,660
                                                                                        $                     
80   Select Milwaukee, Inc.                                                   WI                             26,640
                                                                                        $                     

                                                                         SUBTOTAL       $               7,747,380
                                                                         AVERAGE        $                    96,842

                                                                            GRAND 
                                                                                                     48,198,780
                                                                                        $             
                                                                            TOTAL
                                   Appendix C
                                 Table of Contents

1. States by Percentage of Total Units Delivered

2. Alphabetical Listing of all MSAs with Units of Counseling Delivered

3. Alphabetical Listing of all Rural Areas of States with Units of Counseling Delivered

4. States with NFMC Program Clients Listing Reduction in or Loss of Income as
   Primary Reason for Default

5. States with NFMC Program Clients Reporting Mortgages with Interest Rates At or
   Above 8%

6. States with NFMC Program Clients Current on Mortgage Payment at Intake

7. States with NFMC Program Clients Over 120 Days Late on Mortgage Payment at
   Intake

8. States with NFMC Program Clients Paying more than 75% of Income to Principal,
   Interest, Taxes, and Insurance

9. States with NFMC Program Clients Paying less than 30% of Income to Principal,
   Interest, Taxes, and Insurance

10. States with NFMC Program Clients with Income less than 80% of AMI

11. States with NFMC Program Clients with Income less than 50% of AMI
 1. States by Percentage of Total Units Delivered
   Reference Tables 4.1 and 4.2, page 31. Sources: MBA National Delinquency Survey, Second
   Quarter 2009, and NFMC Program Reported Data
                                                              Percentage of   Percentage of
                      Number of Units   Percentage of Total
         State                                                  National        National
                        Delivered        Units Delivered
                                                              Delinquencies   Foreclosures
California                122,003             16.93%             14.14%          17.50%
Florida                    56,587             7.85%              9.77%           21.82%
Ohio                       48,413              6.72%             3.69%           3.44%
Illinois                   36,272             5.03%              4.11%           4.22%
Maryland                   31,951             4.43%              2.40%           2.03%
Michigan                   30,645              4.25%             4.25%           3.13%
Georgia                    29,215             4.05%              4.70%           2.90%
Pennsylvania               26,247             3.64%              3.29%           2.09%
Minnesota                  25,310              3.51%             1.45%           1.59%
North Carolina             25,202              3.50%             3.13%           1.39%
Texas                      24,334              3.38%             7.01%           2.96%
Arizona                    22,852              3.17%             3.11%           3.80%
New York                   21,059              2.92%             4.19%           3.73%
South Carolina             17,436              2.42%             1.50%           1.05%
Massachusetts              17,414             2.42%              1.70%           1.35%
Virginia                  14,552              2.02%              2.51%           1.60%
Missouri                   13,863             1.92%              1.88%           0.91%
Colorado                   13,721              1.90%             1.55%           1.40%
Tennessee                  13,390              1.86%              2.20%          0.97%
New Jersey                 12,814              1.78%             2.64%           3.31%
Nevada                     12,158             1.69%              1.74%           2.65%
Wisconsin                   8,409             1.17%              1.06%           1.12%
Indiana                     8,344              1.16%             2.42%           1.89%
Washington                  7,812              1.08%             1.79%           1.53%
Connecticut                 7,230              1.00%             1.03%           0.89%
Mississippi                6,629              0.92%              0.84%           0.35%
Kentucky                    6,547              0.91%             0.92%           0.68%
Iowa                        6,023              0.84%              0.56%          0.45%
Alabama                    5,073              0.70%              1.49%           0.63%
Oregon                      4,851              0.67%              0.96%          0.85%
Rhode Island                4,167              0.58%             0.32%           0.29%
Louisiana                   3,861              0.54%             1.18%           0.66%
Puerto Rico                 3,169              0.44%              0.12%           N/A
Oklahoma                    3,115              0.43%              0.83%          0.54%
Delaware                    3,090              0.43%              0.33%          0.25%
Arkansas                    2,626             0.36%              0.63%           0.30%
Kansas                      2,424             0.34%              0.59%           0.35%
                                                                   Percentage of   Percentage of
                           Number of Units   Percentage of Total
          State                                                      National        National
                             Delivered        Units Delivered
                                                                   Delinquencies   Foreclosures 
New Mexico                      2,385              0.33%              0.44%           0.35%
Utah                            2,343              0.33%              0.77%           0.64%
Montana                         2,270              0.32%              0.16%           0.11%
District of Columbia            2,259              0.31%              0.17%           0.14%
Maine                           1,841              0.26%              0.28%           0.31%
New Hampshire                   1,739              0.24%              0.38%           0.23%
Idaho                           1,582              0.22%              0.47%           0.44%
South Dakota                    1,566              0.22%              0.09%           0.07%
West Virginia                   1,513              0.21%              0.32%           0.15%
Nebraska                        1,437              0.20%              0.31%           0.20%
Hawaii                           919               0.13%              0.25%           0.33%
Alaska                           848               0.12%              0.11%           0.06%
Vermont                          370               0.05%              0.09%           0.08%
North Dakota                     304               0.04%              0.06%           0.03%
Wyoming                          288               0.04%              0.09%           0.04%
Virgin Islands                    10               0.00%              0.00%            N/A 
Guam                              5                0.00%              0.00%            N/A 
                  Total:       720,488            100.00%            100.00%          100% 
  2. Alphabetical Listing of all MSAs with Units of Counseling Delivered
Reference Table 4.3, page 32. Sources: NFMC Program Reported Data; 2008 Population from U.S. Bureau of the Census,
2008 American Communities Survey; Delinquent Loans from LoanPerformace.com, June 2009.
Shaded rows are MSAs of Greatest Need

                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
                                     Total:     861,322     1,142,874    694,942     67.57%        144.42%        82.09%

Abilene, TX                       159,521        203           42          59        140.48%       20.69%         29.06%
Akron, OH                         698,553        2,138        5,403       3,037      56.21%        252.71%        142.05%
Albany, GA                        164,919        330          1,878        449       23.91%        569.09%        136.06%
Albany-Schenectady-Troy, NY       853,919        1,766        883          684       77.46%        50.00%         38.73%
Albuquerque, NM                   845,913        1,642        2,939       1,697      57.74%        178.99%        103.35%
Alexandria, LA                    153,105        270          170          110       64.71%        62.96%         40.74%
Allentown-Bethlehem-Easton,
                                  808,210        2,566        3,538       1,466      41.44%        137.88%        57.13%
PA-NJ
Altoona, PA                       125,174        307          408          143       35.05%        132.90%        46.58%
Amarillo, TX                      243,838        367          109          103       94.50%        29.70%         28.07%
Ames, IA                          86,754          56          362          133       36.74%        646.43%        237.50%
Anchorage, AK                     364,701        611          882          597       67.69%        144.35%        97.71%
Anderson, IN                      131,501        431          490          182       37.14%        113.69%        42.23%
Anderson, SC                      182,825        297          405          259       63.95%        136.36%        87.21%
Ann Arbor, MI                     347,376        712          1,039        771       74.21%        145.93%        108.29%
Anniston-Oxford, AL               113,419        278          226          79        34.96%        81.29%         28.42%
Appleton, WI                      219,720        212          655          336       51.30%        308.96%        158.49%
Asheville, NC                     408,436        732          559          834       149.19%       76.37%         113.93%
Athens-Clarke County, GA          189,264        364          258          231       89.53%        70.88%         63.46%
Atlanta-Sandy Springs-
                                 5,376,285      21,193       31,289      22,266      71.16%        147.64%        105.06%
Marietta, GA
Atlantic City-Hammonton, NJ       270,681        1,089        513          239       46.59%        47.11%         21.95%
Auburn-Opelika, AL                133,010        221          169          140       82.84%        76.47%         63.35%
Augusta-Richmond County,
                                  534,218        846          1,702       1,146      67.33%        201.18%        135.46%
GA-SC
Austin-Round Rock, TX            1,652,602       2,370        2,380       1,406      59.08%        100.42%        59.32%
Bakersfield, CA                   800,458        5,675        5,321       3,147      59.14%        93.76%         55.45%
Baltimore-Towson, MD             2,667,117       9,046       16,494      10,410      63.11%        182.33%        115.08%
Bangor, ME                        148,651        286          300          248       82.67%        104.90%        86.71%
Barnstable Town, MA               221,049        915          2,094       1,570      74.98%        228.85%        171.58%
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
Baton Rouge, LA                   774,327        2,563        1,531        759       49.58%        59.73%         29.61%
Battle Creek, MI                  135,861        486          1,031        678       65.76%        212.14%        139.51%
Bay City, MI                      107,495        241          225          157       69.78%        93.36%         65.15%
Beaumont-Port Arthur, TX          378,255        777          419          171       40.81%        53.93%         22.01%
Bellingham, WA                    196,529        360          128          118       92.19%        35.56%         32.78%
Bend, OR                          158,456        603          914          625       68.38%        151.58%        103.65%
Billings, MT                      152,005        148          576          304       52.78%        389.19%        205.41%
Binghamton, NY                    245,189        311          103          71        68.93%        33.12%         22.83%
Birmingham-Hoover, AL            1,117,608       4,067        3,637       2,119      58.26%        89.43%         52.10%
Bismarck, ND                      104,944         79           51          60        117.65%       64.56%         75.95%
Blacksburg-Christiansburg-
                                  158,328        134          114          105       92.11%        85.07%         78.36%
Radford, VA
Bloomington, IN                   183,944        251          264          80        30.30%        105.18%        31.87%
Bloomington-Normal, IL            165,298        161          354          119       33.62%        219.88%        73.91%
Boise City-Nampa, ID              599,753        1,282        1,928        931       48.29%        150.39%        72.62%
Boston-Cambridge-Quincy,
                                 4,522,858      13,891       19,875      10,881      54.75%        143.08%        78.33%
MA-NH
Boulder, CO                       293,161        403          924          599       64.83%        229.28%        148.64%
Bowling Green, KY                 117,947        133          302          83        27.48%        227.07%        62.41%
Bradenton-Sarasota-Venice, FL     687,823        2,619        1,370        620       45.26%        52.31%         23.67%
Bremerton-Silverdale, WA          239,769        646          332          347       104.52%       51.39%         53.72%
Bridgeport-Stamford-Norwalk,
                                  895,030        3,500        4,300       2,655      61.74%        122.86%        75.86%
CT
Brownsville-Harlingen, TX         392,736        1,075        1,934        830       42.92%        179.91%        77.21%
Brunswick, GA                     102,850        233          545          231       42.39%        233.91%        99.14%
Buffalo-Niagara Falls, NY        1,124,309       1,753        1,531       1,095      71.52%        87.34%         62.46%
Burlington, NC                    148,053        386          1,066        675       63.32%        276.17%        174.87%
Burlington-South Burlington,
                                  208,460        203           80          75        93.75%        39.41%         36.95%
VT
Canton-Massillon, OH              407,653        1,176        1,819       1,394      76.64%        154.68%        118.54%
Cape Coral-Fort Myers, FL         593,136        3,614        4,592       2,177      47.41%        127.06%        60.24%
Carson City, NV                   54,867         163          222          112       50.45%        136.20%        68.71%
Casper, WY                        73,129         156           54          51        94.44%        34.62%         32.69%
Cedar Rapids, IA                  255,452        318          550          395       71.82%        172.96%        124.21%
Champaign-Urbana, IL              224,191        184          513          174       33.92%        278.80%        94.57%
Charleston, WV                    303,944        275          459          444       96.73%        166.91%        161.45%
Charleston-North Charleston-
                                  644,506        1,533        3,493       2,844      81.42%        227.85%        185.52%
Summerville, SC
                                               Sub-Prime
                                     2008                                 Actual
                                                 & Alt-A
                                 Population                  Awarded     Counsel-    Percent of
                                               Number of                                           Awarded         Actual
                                 (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                     Loans                                           Penetration/   Penetration/
                                   Census                    Counsel-    Delivered   ing Units
                                               Delinquent                                          Coverage       Coverage
                                 Population                  ing Units     as of     Delivered
                                               (as of June
                                  Estimates)                              8/18/09
                                                   09)
Charlotte-Gastonia-Concord,
                                  1,701,799       4,433       16,343       7,825      47.88%        368.67%        176.52%
NC-SC
Charlottesville, VA                194,391        284          288          216       75.00%        101.41%        76.06%
Chattanooga, TN-GA                 518,441        2,013        698          445       63.75%        34.67%         22.11%
Cheyenne, WY                       87,542         148          117          97        82.91%        79.05%         65.54%
Chicago-Naperville-Joliet, IL-
                                  9,569,624      36,784       53,984      35,329      65.44%        146.76%        96.04%
IN-WI
Chico, CA                          220,337        721          269          331       123.05%       37.31%         45.91%
Cincinnati-Middletown, OH-
                                  2,155,137       5,531       14,298       7,348      51.39%        258.51%        132.85%
KY-IN
Clarksville, TN-KY                 261,220        489          381          218       57.22%        77.91%         44.58%
Cleveland, TN                      112,143        359          141          100       70.92%        39.28%         27.86%
Cleveland-Elyria-Mentor, OH       2,088,291       7,366       25,491      16,391      64.30%        346.06%        222.52%
Coeur d'Alene, ID                  137,475        352          172          238       138.37%       48.86%         67.61%
College Station-Bryan, TX          207,425        178           45          85        188.89%       25.28%         47.75%
Colorado Springs, CO               617,714        1,616        709         1,079      152.19%       43.87%         66.77%
Columbia, MO                       164,283        170          202          130       64.36%        118.82%        76.47%
Columbia, SC                       728,063        1,826        3,072       5,403      175.88%       168.24%        295.89%
Columbus, GA-AL                    287,653        777          1,429        724       50.66%        183.91%        93.18%
Columbus, IN                       75,360         125          289          117       40.48%        231.20%        93.60%
Columbus, OH                      1,773,120       4,582       11,276       6,992      62.01%        246.09%        152.60%
Corpus Christi, TX                 415,376        1,043        647          409       63.21%        62.03%         39.21%
Corvallis, OR                      81,859          46           99          47        47.47%        215.22%        102.17%
Cumberland, MD-WV                  99,033         147          174          93        53.45%        118.37%        63.27%
Dallas-Fort Worth-Arlington,
                                  6,300,006      17,797       12,845       7,424      57.80%        72.18%         41.71%
TX
Dalton, GA                         134,139        278          910          504       55.38%        327.34%        181.29%
Danville, IL                       80,680          89          468          80        17.09%        525.84%        89.89%
Danville, VA                       105,783        160          265          81        30.57%        165.63%        50.63%
Davenport-Moline-Rock
                                   377,626        616          1,243        734       59.05%        201.79%        119.16%
Island, IA-IL
Dayton, OH                         836,544        2,227       10,850       6,977      64.30%        487.20%        313.29%
Decatur, AL                        150,125        277          114          89        78.07%        41.16%         32.13%
Decatur, IL                        108,328        192          434          114       26.27%        226.04%        59.38%
Deltona-Daytona Beach-
                                   498,036        2,714        1,948       1,024      52.57%        71.78%         37.73%
Ormond Beach, FL
Denver-Aurora, CO                 2,506,626       7,290       15,211       9,754      64.12%        208.66%        133.80%
Des Moines-West Des Moines,
                                   556,230        1,103        3,831       2,199      57.40%        347.33%        199.37%
IA
Detroit-Warren-Livonia, MI        4,425,110      23,705       49,451      19,632      39.70%        208.61%        82.82%
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
Dothan, AL                        140,961         238         141          105       74.47%        59.24%         44.12%
Dover, DE                         155,415        455          791          660       83.44%        173.85%        145.05%
Dubuque, IA                       92,724          68          291          161       55.33%        427.94%        236.76%
Duluth, MN-WI                     274,571        476          1,371       1,005      73.30%        288.03%        211.13%
Durham, NC                        489,762        875          3,127       1,365      43.65%        357.37%        156.00%
Eau Claire, WI                    158,742        150          145          105       72.41%        96.67%         70.00%
El Centro, CA                     163,972        1,226        1,275        595       46.67%        104.00%        48.53%
El Paso, TX                       742,062        1,939        2,888       1,494      51.73%        148.94%        77.05%
Elizabethtown, KY                 112,268        233          286          184       64.34%        122.75%        78.97%
Elkhart-Goshen, IN                199,137        470          880          603       68.52%        187.23%        128.30%
Elmira, NY                        87,813         161           86          52        60.47%        53.42%         32.30%
Erie, PA                          279,175        496          1,060        526       49.62%        213.71%        106.05%
Eugene-Springfield, OR            346,560        790          593          452       76.22%        75.06%         57.22%
Evansville, IN-KY                 350,261        738          1,177        368       31.27%        159.49%        49.86%
Fairbanks, AK                     97,970         102          120          134       111.67%       117.65%        131.37%
Fargo, ND-MN                      195,685        222          258          220       85.27%        116.22%        99.10%
Farmington, NM                    122,500         99          103          101       98.06%        104.04%        102.02%
Fayetteville, NC                  356,105        760          3,054       1,051      34.41%        401.84%        138.29%
Fayetteville-Springdale-
                                  443,976        754          720          962       133.61%       95.49%         127.59%
Rogers, AR-MO
Flagstaff, AZ                     128,558        173          216          174       80.56%        124.86%        100.58%
Flint, MI                         428,790        2,096        3,685       3,611      97.99%        175.81%        172.28%
Florence, SC                      199,831        448          953          591       62.01%        212.72%        131.92%
Florence-Muscle Shoals, AL        143,791        222          165          64        38.79%        74.32%         28.83%
Fond du Lac, WI                   99,453         110          430          192       44.65%        390.91%        174.55%
Fort Collins-Loveland, CO         292,825        563          1,008        739       73.31%        179.04%        131.26%
Fort Smith, AR-OK                 290,977        394          208          353       169.71%       52.79%         89.59%
Fort Walton Beach-Crestview-
                                  179,693        493          203          204       100.49%       41.18%         41.38%
Destin, FL
Fort Wayne, IN                    411,154        1,119        1,416        726       51.27%        126.54%        64.88%
Fresno, CA                        909,153        5,346        8,442       4,627      54.81%        157.91%        86.55%
Gadsden, AL                       103,303        224          170          56        32.94%        75.89%         25.00%
Gainesville, FL                   258,555        468          870          180       20.69%        185.90%        38.46%
Gainesville, GA                   184,814        496          442          481       108.82%       89.11%         96.98%
Glens Falls, NY                   128,775        358          119          100       84.03%        33.24%         27.93%
Goldsboro, NC                     113,671        184          837          268       32.02%        454.89%        145.65%
Grand Forks, ND-MN                97,279          66          199          124       62.31%        301.52%        187.88%
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
Grand Junction, CO                143,171         285         186          193       103.76%       65.26%         67.72%
Grand Rapids-Wyoming, MI          776,833        2,097        2,077       1,281      61.68%        99.05%         61.09%
Great Falls, MT                   82,026          93          528          343       64.96%        567.74%        368.82%
Greeley, CO                       249,775        782          944          800       84.75%        120.72%        102.30%
Green Bay, WI                     302,935        379          925          490       52.97%        244.06%        129.29%
Greensboro-High Point, NC         705,684        1,736        3,417       2,158      63.15%        196.83%        124.31%
Greenville, NC                    176,758        312          1,302        482       37.02%        417.31%        154.49%
Greenville-Mauldin-Easley, SC     624,715        1,087        1,747        847       48.48%        160.72%        77.92%
Gulfport-Biloxi, MS               234,625        568          1,241        394       31.75%        218.49%        69.37%
Hagerstown-Martinsburg,
                                  263,753        787          818          820       100.24%       103.94%        104.19%
MD-WV
Hanford-Corcoran, CA              149,518        684          491          359       73.12%        71.78%         52.49%
Harrisburg-Carlisle, PA           531,108        1,102        625          577       92.32%        56.72%         52.36%
Harrisonburg, VA                  118,409        128          114          51        44.74%        89.06%         39.84%
Hartford-West Hartford-East
                                 1,190,512       3,425        3,971       1,944      48.95%        115.94%        56.76%
Hartford, CT
Hattiesburg, MS                   140,781        298          1,111        347       31.23%        372.82%        116.44%
Hickory-Lenoir-Morganton,
                                  363,036        682          1,692       1,249      73.82%        248.09%        183.14%
NC
Hinesville-Fort Stewart, GA       69,943         118          305          170       55.74%        258.47%        144.07%
Holland-Grand Haven, MI           260,364        466          1,470        335       22.79%        315.45%        71.89%
Honolulu, HI                      905,034        1,763        757          508       67.11%        42.94%         28.81%
Hot Springs, AR                   97,465         162           30          41        136.67%       18.52%         25.31%
Houma-Bayou Cane-
                                  201,148        303          417          126       30.22%        137.62%        41.58%
Thibodaux, LA
Houston-Sugar Land-
                                 5,728,143      11,104       12,739       7,844      61.57%        114.72%        70.64%
Baytown, TX
Huntington-Ashland, WV-KY-
                                  284,234        417          413          204       49.39%        99.04%         48.92%
OH
Huntsville, AL                    395,645        755          299          266       88.96%        39.60%         35.23%
Idaho Falls, ID                   122,995        271           4            0         0.00%         1.48%          0.00%
Indianapolis-Carmel, IN          1,715,459       4,414        6,764       3,387      50.07%        153.24%        76.73%
Iowa City, IA                     149,437         82          265          126       47.55%        323.17%        153.66%
Ithaca, NY                        101,136         57           43          21        48.84%        75.44%         36.84%
Jackson, MI                       160,180        600          654          399       61.01%        109.00%        66.50%
Jackson, MS                       537,285        2,044        3,948       3,210      81.31%        193.15%        157.05%
Jackson, TN                       112,685        479          370          261       70.54%        77.24%         54.49%
Jacksonville, FL                 1,313,228       5,306       10,728       7,246      67.54%        202.19%        136.56%
Jacksonville, NC                  165,938        178          143          120       83.92%        80.34%         67.42%
                                               Sub-Prime
                                     2008                                 Actual
                                                 & Alt-A
                                 Population                  Awarded     Counsel-    Percent of
                                               Number of                                           Awarded         Actual
                                 (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                     Loans                                           Penetration/   Penetration/
                                   Census                    Counsel-    Delivered   ing Units
                                               Delinquent                                          Coverage       Coverage
                                 Population                  ing Units     as of     Delivered
                                               (as of June
                                  Estimates)                              8/18/09
                                                   09)
Janesville, WI                     160,213         390         526          316       60.08%        134.87%        81.03%
Jefferson City, MO                 146,363        144          115          74        64.35%        79.86%         51.39%
Johnson City, TN                   195,849        295          149          155       104.03%       50.51%         52.54%
Johnstown, PA                      144,319        198          202          131       64.85%        102.02%        66.16%
Jonesboro, AR                      117,361        119          565          45         7.96%        474.79%        37.82%
Joplin, MO                         172,933        295          569          135       23.73%        192.88%        45.76%
Kalamazoo-Portage, MI              323,713        748          1,027        664       64.65%        137.30%        88.77%
Kankakee-Bradley, IL               112,524        310          234          153       65.38%        75.48%         49.35%
Kansas City, MO-KS                2,002,047       6,065        9,489       5,723      60.31%        156.46%        94.36%
Kennewick-Pasco-Richland,
                                   235,841        394          106          77        72.64%        26.90%         19.54%
WA
Killeen-Temple-Fort Hood, TX       378,935        565          237          237       100.00%       41.95%         41.95%
Kingsport-Bristol-Bristol, TN-
                                   304,689        453          310          289       93.23%        68.43%         63.80%
VA
Kingston, NY                       181,670        567          266          167       62.78%        46.91%         29.45%
Knoxville, TN                      691,152        2,024        1,394        861       61.76%        68.87%         42.54%
Kokomo, IN                         99,304         336          445          141       31.69%        132.44%        41.96%
La Crosse, WI-MN                   131,872        100          367          195       53.13%        367.00%        195.00%
Lafayette, IN                      192,870        234          154          78        50.65%        65.81%         33.33%
Lafayette, LA                      259,073        435           85          149       175.29%       19.54%         34.25%
Lake Charles, LA                   192,856        363          218          151       69.27%        60.06%         41.60%
Lake Havasu City-Kingman,
                                   196,281        754           35           0         0.00%         4.64%          0.00%
AZ
Lakeland-Winter Haven, FL          580,594        2,170        1,351        645       47.74%        62.26%         29.72%
Lancaster, PA                      502,370        702          822          843       102.55%       117.09%        120.09%
Lansing-East Lansing, MI           454,035        1,388        1,542        787       51.04%        111.10%        56.70%
Laredo, TX                         236,941        820          275          176       64.00%        33.54%         21.46%
Las Cruces, NM                     201,603        217          471          258       54.78%        217.05%        118.89%
Las Vegas-Paradise, NV            1,865,746      11,465       16,361      10,860      66.38%        142.70%        94.72%
Lawrence, KS                       114,748        118          157          97        61.78%        133.05%        82.20%
Lawton, OK                         111,772        171          117          97        82.91%        68.42%         56.73%
Lebanon, PA                        128,934        222          274          149       54.38%        123.42%        67.12%
Lewiston, ID-WA                    60,395          91          215          42        19.53%        236.26%        46.15%
Lewiston-Auburn, ME                106,877        260          250          134       53.60%        96.15%         51.54%
Lexington-Fayette, KY              453,424        810          1,008        622       61.71%        124.44%        76.79%
Lima, OH                           105,168        288          153          161       105.23%       53.13%         55.90%
Lincoln, NE                        295,486        326          707          287       40.59%        216.87%        88.04%
                                               Sub-Prime
                                     2008                                 Actual
                                                 & Alt-A
                                 Population                  Awarded     Counsel-    Percent of
                                               Number of                                           Awarded         Actual
                                 (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                     Loans                                           Penetration/   Penetration/
                                   Census                    Counsel-    Delivered   ing Units
                                               Delinquent                                          Coverage       Coverage
                                 Population                  ing Units     as of     Delivered
                                               (as of June
                                  Estimates)                              8/18/09
                                                   09)
Little Rock-North Little Rock-
                                   675,069        1,654        848          701       82.67%        51.27%         42.38%
Conway, AR
Logan, UT-ID                       125,070        158          113          34        30.09%        71.52%         21.52%
Longview, TX                       204,746        380           90          113       125.56%       23.68%         29.74%
Longview, WA                       101,254        289          250          240       96.00%        86.51%         83.04%
Los Angeles-Long Beach-Santa
                                 12,872,808      65,953       65,679      33,274      50.66%        99.58%         50.45%
Ana, CA
Louisville/Jefferson County,
                                  1,244,696       3,137        7,831       4,099      52.34%        249.63%        130.67%
KY-IN
Lubbock, TX                        270,610        395           54          147       272.22%       13.67%         37.22%
Lynchburg, VA                      245,809        436          206          232       112.62%       47.25%         53.21%
Macon, GA                          230,777        857          1,154        586       50.78%        134.66%        68.38%
Madera, CA                         148,333        979          1,435        729       50.80%        146.58%        74.46%
Madison, WI                        561,505        589          473          517       109.30%       80.31%         87.78%
Manchester-Nashua, NH              402,042        1,414        608          507       83.39%        43.00%         35.86%
Mansfield, OH                      124,999        284          389          477       122.62%       136.97%        167.96%
McAllen-Edinburg-Mission,
                                   726,604        2,124        2,004       1,322      65.97%        94.35%         62.24%
TX
Medford, OR                        201,138        673          371          188       50.67%        55.13%         27.93%
Memphis, TN-MS-AR                 1,285,732       9,003        9,201       5,909      64.22%        102.20%        65.63%
Merced, CA                         246,117        1,695        1,939       1,277      65.86%        114.40%        75.34%
Miami-Fort Lauderdale-
                                  5,414,772      34,758       31,273      21,407      68.45%        89.97%         61.59%
Pompano Beach, FL
Michigan City-La Porte, IN         110,888        367          266          112       42.11%        72.48%         30.52%
Midland, TX                        129,494        225           41          51        124.39%       18.22%         22.67%
Milwaukee-Waukesha-West
                                  1,549,308       4,231        9,123       4193       45.96%        215.62%        99.10%
Allis, WI
Minneapolis-St. Paul-
                                  3,229,878       9,819       30,459      19,744      64.82%        310.20%        201.08%
Bloomington, MN-WI
Missoula, MT                       107,320        139          475          311       65.47%        341.73%        223.74%
Mobile, AL                         406,309        1,544        818          710       86.80%        52.98%         45.98%
Modesto, CA                        510,694        3,872        4,420       2,586      58.51%        114.15%        66.79%
Monroe, LA                         172,743        348          232          131       56.47%        66.67%         37.64%
Monroe, MI                         152,949        525          326          398       122.09%       62.10%         75.81%
Montgomery, AL                     365,924        933          926          412       44.49%        99.25%         44.16%
Morgantown, WV                     118,506         53           37          26        70.27%        69.81%         49.06%
Morristown, TN                     135,914        346          637          284       44.58%        184.10%        82.08%
Mount Vernon-Anacortes, WA         118,000        278           63          74        117.46%       22.66%         26.62%
Muncie, IN                         114,685        274          318          116       36.48%        116.06%        42.34%
Muskegon-Norton Shores, MI         174,344        611          765          396       51.76%        125.20%        64.81%
                                               Sub-Prime
                                     2008                                 Actual
                                                 & Alt-A
                                 Population                  Awarded     Counsel-    Percent of
                                               Number of                                           Awarded         Actual
                                 (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                     Loans                                           Penetration/   Penetration/
                                   Census                    Counsel-    Delivered   ing Units
                                               Delinquent                                          Coverage       Coverage
                                 Population                  ing Units     as of     Delivered
                                               (as of June
                                  Estimates)                              8/18/09
                                                   09)
Myrtle Beach-North Myrtle
                                   257,380        496          568           0         0.00%        114.52%         0.00%
Beach-Conway, SC
Napa, CA                           133,433        632          269          274       101.86%       42.56%         43.35%
Naples-Marco Island, FL            315,258        1,379        1,690       1,143      67.63%        122.55%        82.89%
Nashville-Davidson-
                                  1,550,733       5,197        6,355       4,775      75.14%        122.28%        91.88%
Murfreesboro-Franklin, TN
New Haven-Milford, CT              846,101        3,424        3,814       2,069      54.25%        111.39%        60.43%
New Orleans-Metairie-Kenner,
                                  1,134,029       3,561        5,153       1,732      33.61%        144.71%        48.64%
LA
New York-Northern New
                                 19,006,798      53,606       45,514      25,950      57.02%        84.90%         48.41%
Jersey-Long Island, NY-NJ-PA
Niles-Benton Harbor, MI            159,481        583          302          196       64.90%        51.80%         33.62%
Norwich-New London, CT             264,519        887          734          321       43.73%        82.75%         36.19%
Ocala, FL                          329,628        1,196        597          511       85.59%        49.92%         42.73%
Ocean City, NJ                     95,838         315          200          112       56.00%        63.49%         35.56%
Odessa, TX                         131,941        254          100          26        26.00%        39.37%         10.24%
Ogden-Clearfield, UT               531,488        1,097        276          319       115.58%       25.16%         29.08%
Oklahoma City, OK                 1,206,142       2,558        1,801       1,345      74.68%        70.41%         52.58%
Olympia, WA                        245,181        563          273          280       102.56%       48.49%         49.73%
Omaha-Council Bluffs, NE-IA        837,925        1,891        2,578       1,186      46.00%        136.33%        62.72%
Orlando-Kissimmee, FL             2,054,574       8,842       12,119       8,764      72.32%        137.06%        99.12%
Oshkosh-Neenah, WI                 162,111        204          659          351       53.26%        323.04%        172.06%
Other                              #N/A             -           17
Owensboro, KY                      112,762        129          217          85        39.17%        168.22%        65.89%
Oxnard-Thousand Oaks-
                                   797,740        4,262        6,174       3,148      50.99%        144.86%        73.86%
Ventura, CA
Palm Bay-Melbourne-
                                   536,521        2,358        1,422       1,151      80.94%        60.31%         48.81%
Titusville, FL
Palm Coast, FL                     91,247         452           73           0         0.00%        16.15%          0.00%
Panama City-Lynn Haven, FL         163,946        447          190          203       106.84%       42.51%         45.41%
Parkersburg-Marietta-Vienna,
                                   160,678        154          245          155       63.27%        159.09%        100.65%
WV-OH
Pascagoula, MS                     153,100        390          477          241       50.52%        122.31%        61.79%
Pensacola-Ferry Pass-Brent, FL     452,992        1,293        799          641       80.23%        61.79%         49.57%
Peoria, IL                         372,487        585          718          407       56.69%        122.74%        69.57%
Philadelphia-Camden-
                                  5,838,471      17,752       35,714      18,051      50.54%        201.18%        101.68%
Wilmington, PA-NJ-DE-MD
Phoenix-Mesa-Scottsdale, AZ       4,281,899      17,613       25,776      18,650      72.35%        146.35%        105.89%
Pine Bluff, AR                     100,647        211          452          63        13.94%        214.22%        29.86%
Pittsburgh, PA                    2,351,192       6,109        8,045       4,199      52.19%        131.69%        68.73%
Pittsfield, MA                     129,395        233          301          219       72.76%        129.18%        93.99%
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
Pocatello, ID                     88,495          162         345          49        14.20%        212.96%        30.25%
Port St. Lucie, FL                403,768        2,401        2,624       1,247      47.52%        109.29%        51.94%
Portland-South Portland-
                                  514,065        1,327        934          824       88.22%        70.38%         62.09%
Biddeford, ME
Portland-Vancouver-
                                 2,207,462       6,463        4,537       3,620      79.79%        70.20%         56.01%
Beaverton, OR-WA
Poughkeepsie-Newburgh-
                                  672,525        2,891        1,978       1,186      59.96%        68.42%         41.02%
Middletown, NY
Prescott, AZ                      215,503        609          570          563       98.77%        93.60%         92.45%
Providence-New Bedford-Fall
                                 1,596,611       5,801       10,307       5,514      53.50%        177.68%        95.05%
River, RI-MA
Provo-Orem, UT                    540,820        1,121        235          243       103.40%       20.96%         21.68%
Pueblo, CO                        156,737        665          828          540       65.22%        124.51%        81.20%
Punta Gorda, FL                   150,060        744          544          572       105.15%       73.12%         76.88%
Racine, WI                        199,510        499          627          260       41.47%        125.65%        52.10%
Raleigh-Cary, NC                 1,088,765       1,813        3,233       3,216      99.47%        178.32%        177.39%
Rapid City, SD                    122,522        161          492          155       31.50%        305.59%        96.27%
Reading, PA                       403,595        886          733          475       64.80%        82.73%         53.61%
Redding, CA                       180,214        819          364          366       100.55%       44.44%         44.69%
Reno-Sparks, NV                   414,784        1,489        2,192       1,506      68.70%        147.21%        101.14%
Richmond, VA                     1,225,626       4,080        2,952       2,152      72.90%        72.35%         52.75%
Riverside-San Bernardino-
                                 4,115,871      37,878       32,834      21,908      66.72%        86.68%         57.84%
Ontario, CA
Roanoke, VA                       298,108        688          509          409       80.35%        73.98%         59.45%
Rochester, MN                     182,924        275          673          517       76.82%        244.73%        188.00%
Rochester, NY                    1,034,090       1,688        2,129       1,407      66.09%        126.13%        83.35%
Rockford, IL                      354,394        1,044        1,356        926       68.29%        129.89%        88.70%
Rocky Mount, NC                   146,356        364          393          360       91.60%        107.97%        98.90%
Rome, GA                          95,980         184          127          95        74.80%        69.02%         51.63%
Sacramento--Arden-Arcade--
                                 2,109,832      13,256       10,770       4,050      37.60%        81.25%         30.55%
Roseville, CA
Saginaw-Saginaw Township
                                  200,745        598          2,835        538       18.98%        474.08%        89.97%
North, MI
Salem, OR                         391,680        1,050        404          414       102.48%       38.48%         39.43%
Salinas, CA                       408,238        2,044        1,401       1,393      99.43%        68.54%         68.15%
Salisbury, MD                     120,165        343          916          348       37.99%        267.06%        101.46%
Salt Lake City, UT               1,115,692       3,249        2,711       1,456      53.71%        83.44%         44.81%
San Angelo, TX                    109,563        136           35          31        88.57%        25.74%         22.79%
San Antonio, TX                  2,031,445       4,424        5,480       2,271      41.44%        123.87%        51.33%
San Diego-Carlsbad-San
                                 3,001,072      14,020       19,343      13,914      71.93%        137.97%        99.24%
Marcos, CA
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
San Francisco-Oakland-
                                 4,274,531      17,026       25,333      14,898      58.81%        148.79%        87.50%
Fremont, CA
San Jose-Sunnyvale-Santa
                                 1,819,198       7,095        7,418       4,568      61.58%        104.55%        64.38%
Clara, CA
San Juan-Caguas-Guaynabo,
                                  #N/A                        2,555
PR
San Luis Obispo-Paso Robles,
                                  265,297        895          429          609       141.96%       47.93%         68.04%
CA
Sandusky, OH                      77,062         225          627          256       40.83%        278.67%        113.78%
Santa Barbara-Santa Maria-
                                  405,396        1,371        1,453       1,466      100.89%       105.98%        106.93%
Goleta, CA
Santa Cruz-Watsonville, CA        253,137        1,137        462          535       115.80%       40.63%         47.05%
Santa Fe, NM                      143,937        234          163          221       135.58%       69.66%         94.44%
Santa Rosa-Petaluma, CA           466,741        2,121        1,632       1,136      69.61%        76.94%         53.56%
Savannah, GA                      334,353        971          2,170        869       40.05%        223.48%        89.50%
Scranton--Wilkes-Barre, PA        549,150        1,428        2,435       1,246      51.17%        170.52%        87.25%
Seattle-Tacoma-Bellevue, WA      3,344,813      10,832        6,018       4,392      72.98%        55.56%         40.55%
Sebastian-Vero Beach, FL          132,315        481           77          213       276.62%       16.01%         44.28%
Sheboygan, WI                     114,561        125          649          252       38.83%        519.20%        201.60%
Sherman-Denison, TX               118,804        289          134          79        58.96%        46.37%         27.34%
Shreveport-Bossier City, LA       389,533        1,106        466          325       69.74%        42.13%         29.39%
Sioux City, IA-NE-SD              143,157        189          478          135       28.24%        252.91%        71.43%
Sioux Falls, SD                   232,930        225          1,377        769       55.85%        612.00%        341.78%
South Bend-Mishawaka, IN-
                                  316,865        1,055        765          368       48.10%        72.51%         34.88%
MI
Spartanburg, SC                   280,738        614          848          568       66.98%        138.11%        92.51%
Spokane, WA                       462,677        1,006        645          471       73.02%        64.12%         46.82%
Springfield, IL                   207,389        252          397          117       29.47%        157.54%        46.43%
Springfield, MA                   687,558        2,270        4,795       2,801      58.42%        211.23%        123.39%
Springfield, MO                   426,144        756          1,640        572       34.88%        216.93%        75.66%
Springfield, OH                   139,859        443          1,545        694       44.92%        348.76%        156.66%
St. Cloud, MN                     186,954        322          657          542       82.50%        204.04%        168.32%
St. George, UT                    137,589        430          282          359       127.30%       65.58%         83.49%
St. Joseph, MO-KS                 126,359        323          618          195       31.55%        191.33%        60.37%
St. Louis, MO-IL                 2,816,710       9,749       15,401      13,209      85.77%        157.98%        135.49%
State College, PA                 144,779        148          445          111       24.94%        300.68%        75.00%
Stockton, CA                      672,388        5,561        8,067       4,339      53.79%        145.06%        78.03%
Sumter, SC                        104,148        235          607          545       89.79%        258.30%        231.91%
Syracuse, NY                      643,794        906          641          418       65.21%        70.75%         46.14%
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
Tallahassee, FL                   357,259         706         527          365       69.26%        74.65%         51.70%
Tampa-St. Petersburg-
                                 2,733,761      11,800       13,465       8,740      64.91%        114.11%        74.07%
Clearwater, FL
Terre Haute, IN                   170,233        359          222          82        36.94%        61.84%         22.84%
Texarkana, TX-Texarkana, AR       135,509        204           60          18        30.00%        29.41%          8.82%
Toledo, OH                        649,104        1,758        3,449       2,441      70.77%        196.19%        138.85%
Topeka, KS                        229,619        378          488          254       52.05%        129.10%        67.20%
Trenton-Ewing, NJ                 364,883        910          267          417       156.18%       29.34%         45.82%
Tucson, AZ                       1,012,018       2,523        6,671       3,902      58.49%        264.41%        154.66%
Tulsa, OK                         916,079        1,917        1,942       1,257      64.73%        101.30%        65.57%
Tuscaloosa, AL                    206,765        369          761          255       33.51%        206.23%        69.11%
Tyler, TX                         201,277        372          130          117       90.00%        34.95%         31.45%
Utica-Rome, NY                    293,790        437          363          186       51.24%        83.07%         42.56%
Valdosta, GA                      133,348        171          190          365       192.11%       111.11%        213.45%
Vallejo-Fairfield, CA             407,515        3,515        3,399       1,918      56.43%        96.70%         54.57%
Victoria, TX                      114,313        170           95          61        64.21%        55.88%         35.88%
Vineland-Millville-Bridgeton,
                                  156,830        503          657          335       50.99%        130.62%        66.60%
NJ
Virginia Beach-Norfolk-
                                 1,658,292       5,129        3,382       2,579      76.26%        65.94%         50.28%
Newport News, VA-NC
Visalia-Porterville, CA           426,276        2,477        2,886       1,501      52.01%        116.51%        60.60%
Waco, TX                          230,213        422          457          197       43.11%        108.29%        46.68%
Warner Robins, GA                 133,161        261          335          166       49.55%        128.35%        63.60%
Washington-Arlington-
                                 5,358,130      20,472       39,672      31,155      78.53%        193.79%        152.18%
Alexandria, DC-VA-MD-WV
Waterloo-Cedar Falls, IA          164,220        193          685          487       71.09%        354.92%        252.33%
Wausau, WI                        130,962        119          168          71        42.26%        141.18%        59.66%
Weirton-Steubenville, WV-OH       122,054        227          456          105       23.03%        200.88%        46.26%
Wenatchee, WA                     108,193        156          966          186       19.25%        619.23%        119.23%
Wheeling, WV-OH                   144,847        203          107          127       118.69%       52.71%         62.56%
Wichita Falls, TX                 147,328        202           60          68        113.33%       29.70%         33.66%
Wichita, KS                       603,716        975          980          443       45.20%        100.51%        45.44%
Williamsport, PA                  116,670        175          809          197       24.35%        462.29%        112.57%
Wilmington, NC                    347,012        649          886          776       87.58%        136.52%        119.57%
Winchester, VA-WV                 122,369        333          269          200       74.35%        80.78%         60.06%
Winston-Salem, NC                 468,124        1,133        1,681       1,394      82.93%        148.37%        123.04%
Worcester, MA                     783,806        3,181        3,822       2,055      53.77%        120.15%        64.60%
Yakima, WA                        234,564        491          1,900        783       41.21%        386.97%        159.47%
                                              Sub-Prime
                                    2008                                 Actual
                                                & Alt-A
                                Population                  Awarded     Counsel-    Percent of
                                              Number of                                           Awarded         Actual
                                (Source: US                  NFMC       ing Units   Counsel-
Metropolitan Statistical Area                    Loans                                           Penetration/   Penetration/
                                  Census                    Counsel-    Delivered   ing Units
                                              Delinquent                                          Coverage       Coverage
                                Population                  ing Units     as of     Delivered
                                              (as of June
                                 Estimates)                              8/18/09
                                                  09)
York-Hanover, PA                  424,583        1,156        1,610       1,148      71.30%        139.27%        99.31%
Youngstown-Warren-
                                  565,947        1,745        2,954       1,964      66.49%        169.28%        112.55%
Boardman, OH-PA
Yuba City, CA                     165,274        1,035        647          392       60.59%        62.51%         37.87%
Yuma, AZ                          194,322        590          469          481       102.56%       79.49%         81.53%
 3. Alphabetical Listing of All Rural Areas of States with
    Units of Counseling Delivered
Reference Table 4.4, page 32. Source: NFMC Program Reported Data
Shaded Rows are Areas of Greatest Need

                 Rural Area of State             Total Counseling Units Delivered

North Carolina                                                5,412
Minnesota                                                     4,566
Ohio                                                          4,325
Pennsylvania                                                  3,106
South Carolina                                                2,934
Georgia                                                       2,720
Michigan                                                      2,565
Mississippi                                                   2,368
Iowa                                                          1,890
Tennessee                                                     1,573
Wisconsin                                                     1,422
Florida                                                       1,404
Montana                                                       1,374
Indiana                                                       1,368
California                                                    1,363
Missouri                                                      1,319
Kentucky                                                      1,275
Virginia                                                      1,066
Illinois                                                      1,038
Texas                                                          984
Maryland                                                       946
Alabama                                                        894
New York                                                       886
Arizona                                                        791
New Hampshire                                                  708
Colorado                                                       670
Maine                                                          663
Oregon                                                         644
Washington                                                     633
South Dakota                                                   632
Louisiana                                                      614
Delaware                                                       575
Oklahoma                                                       549
Arkansas                                                       523
Connecticut                                                    509
Nevada                                                         509
Hawaii                                                         469
West Virginia                                                  451
                 Rural Area of State            Total Counseling Units Delivered

Idaho                                                         371
Nebraska                                                      328
Vermont                                                       299
New Mexico                                                    292
Kansas                                                        271
Wyoming                                                       152
Utah                                                          150
Alaska                                                        115
North Dakota                                                  105
Massachusetts                                                  53
Virgin Islands                                                  9
Guam                                                            5
New Jersey                                                      -
Rhode Island                                                    -
                                       Total:                57,888
  4. States with NFMC Program Clients Listing Reduction in or Loss
     of Income as Primary Reason for Default
       Reference Table 4.10, page 38. Sources: Bureau of Labor Statistics: Local Area
       Unemployment Statistics, September 2009 and NFMC Program Reported Data.
                                Number of Clients     Percent of Clients with
                                                                                State Unemployment
          State or Territory   with Reported Income     Reported Income
                                                                                        Rate
                                      Issues*                 Issues*
Idaho                                  1,023                  69.97%                   8.8%
Oregon                                 3,014                  68.36%                  11.5%
Puerto Rico                            2,101                  67.80%                  N/A
Arizona                               12,758                  64.70%                   9.1%
Florida                               30,780                  62.34%                   11%
Rhode Island                           2,232                  60.83%                   13%
New Mexico                             1,326                  59.65%                   7.7%
Maine                                  1,026                  59.51%                   8.5%
Vermont                                210                    59.49%                   6.7%
Indiana                                4,328                  58.34%                   9.6%
Hawaii                                 511                    58.20%                   7.2%
California                            62,625                  58.16%                  12.2%
Michigan                              15,135                  58.13%                  15.3%
Delaware                               1,612                  58.11%                   8.3%
Washington                             4,112                  58.05%                   9.3%
New Hampshire                          900                    57.40%                   7.2%
Colorado                               6,895                  56.29%                   7%
New Jersey                             6,860                  56.27%                   9.8%
Tennessee                              6,186                  56.17%                  10.5%
Georgia                               14,453                  56.08%                  10.1%
Mississippi                            3,073                  55.72%                   9.2%
Virgin Islands                          5                     55.56%                  N/A
Connecticut                            3,763                  55.18%                   8.4%
Texas                                 11,980                  54.83%                   8.2%
Iowa                                   2,409                  53.77%                   6.7%
Kentucky                               3,048                  53.58%                  10.9%
Alabama                                2,553                  53.24%                  10.7%
Pennsylvania                          12,536                  53.22%                   8.8%
Ohio                                  22,105                  52.95%                  10.1%
Utah                                   1,152                  52.63%                   6.2%
Arkansas                               1,265                  52.45%                   7.1%
New York                               9,758                  52.40%                   8.9%
                                          Number of Clients     Percent of Clients with
                                                                                          State Unemployment
           State or Territory            with Reported Income     Reported Income
                                                                                                  Rate
                                                Issues*                 Issues*
Louisiana                                       1,889                   52.08%                   7.4%
Virginia                                        6,988                   51.84%                   6.7%
Wisconsin                                       3,890                   51.62%                   8.3%
Wyoming                                          146                    51.23%                   6.8%
North Carolina                                  11,219                  51.04%                  10.8%
Missouri                                        6,214                   50.84%                   9.5%
Kansas                                          1,120                   50.63%                   6.9%
Illinois                                        16,618                  50.46%                  10.5%
West Virginia                                    747                    50.44%                   8.9%
Massachusetts                                   7,255                   50.41%                   9.3%
Nevada                                          5,424                   47.81%                  13.3%
Nebraska                                         643                    47.52%                   4.9%
Minnesota                                       10,440                  47.10%                   7.3%
Oklahoma                                        1,243                   46.82%                   6.7%
Montana                                         1,019                   46.66%                   6.7%
South Carolina                                  6,164                   45.46%                  11.6%
Maryland                                        12,024                  44.41%                   7.2%
Alaska                                           324                    41.06%                   8.4%
North Dakota                                     119                    39.80%                   4.2%
South Dakota                                     525                    35.55%                   4.8%
District of Columbia                             619                    32.73%                  11.4%
                                Total:         346,364                  53.49%                   8.9%
            * Income Issues = Reduction in income or loss of income as primary reason for default.
  5. States with NFMC Program Clients Reporting Mortgages
     with Interest Rates At or Above 8%
       Reference Tables 4.11 and Table 4.12, page 40. Source: NFMC Program Reported
       Data.

                                 Percent of NFMC                            Total Percent of
                                                      Percent of NFMC
                                 Clients with Fixed                       NFMC Clients with
           State or Territory                         Clients with ARMs
                                  Rate Loans At or                        Loans with Rates At
                                                       At or Above 8%
                                     Above 8%                                or Above 8%
Mississippi                           32.93%               20.74%               53.67%
Tennessee                             20.85%               21.35%               42.20%
Missouri                              18.39%               23.43%               41.83%
Pennsylvania                          25.02%               15.66%               40.68%
Iowa                                  22.48%               17.70%               40.18%
Louisiana                             23.55%               16.10%               39.65%
Texas                                 21.27%               18.18%               39.45%
Alabama                               25.11%               13.39%               38.50%
Oklahoma                              21.47%               12.05%               33.52%
Michigan                              16.40%               16.97%               33.38%
Virgin Islands                        33.33%                0.00%               33.33%
North Carolina                        19.86%               13.20%               33.06%
Wisconsin                             12.67%               19.72%               32.39%
Kansas                                16.68%               15.46%               32.14%
Ohio                                  18.93%               12.98%               31.92%
Connecticut                           10.76%               20.99%               31.75%
South Carolina                        20.48%               11.20%               31.68%
Delaware                              18.75%               12.29%               31.04%
Nebraska                              17.07%               13.90%               30.97%
Georgia                               16.34%               14.05%               30.39%
Rhode Island                           9.68%               20.63%               30.31%
West Virginia                         22.69%                7.29%               29.98%
Illinois                              12.19%               17.68%               29.88%
Kentucky                              16.35%               13.34%               29.69%
Indiana                               15.41%               13.74%               29.15%
New York                              13.25%               15.56%               28.81%
Maine                                 15.20%               13.23%               28.42%
North Dakota                          17.39%               10.70%               28.09%
Florida                               11.41%               16.58%               27.99%
                                         Percent of NFMC                            Total Percent of
                                                              Percent of NFMC
                                         Clients with Fixed                       NFMC Clients with
           State or Territory                                 Clients with ARMs
                                          Rate Loans At or                        Loans with Rates At
                                                               At or Above 8%
                                             Above 8%                                or Above 8%
Arkansas                                      15.34%               12.60%               27.94%
Vermont                                       16.71%               10.76%               27.48%
New Hampshire                                 11.61%               15.37%               26.98%
Massachusetts                                  8.32%               17.99%               26.30%
Virginia                                      12.69%               13.25%               25.94%
New Mexico                                    16.10%                9.18%               25.28%
Maryland                                       9.90%               15.14%               25.04%
Minnesota                                      8.69%               16.34%               25.03%
New Jersey                                    10.06%               14.58%               24.65%
Colorado                                       8.62%               15.36%               23.98%
District of Columbia                           9.20%               13.80%               23.00%
Arizona                                        7.91%               15.07%               22.98%
Washington                                     9.98%               12.89%               22.87%
Idaho                                         11.42%                9.58%               21.00%
Oregon                                         9.46%               11.39%               20.84%
Alaska                                        11.53%               8.37%                19.90%
Wyoming                                       10.18%                8.77%               18.95%
Utah                                           7.77%               9.91%                17.68%
Nevada                                         6.19%               11.29%               17.48%
Hawaii                                         6.04%               11.39%               17.43%
South Dakota                                  11.37%                5.82%               17.20%
California                                     3.83%               12.12%               15.96%
Montana                                        8.79%                4.62%               13.42%
Puerto Rico                                    8.07%                0.23%               8.29%
                                Total:        14.82%               13.47%               28.30%
  6. States with NFMC Program Clients Current on Mortgage
     Payment at Intake
    Reference Table 4.14, page 41. Source: NFMC Program Reported Data.



           State or Territory   Number of Clients Current   Percent of Clients Current

Montana                                   1,371                      62.77%
South Dakota                              868                        58.77%
District of Columbia                      942                        49.81%
Alaska                                    372                        47.15%
Nevada                                    5,207                      45.90%
Virgin Islands                             4                         44.44%
Utah                                      969                        44.27%
West Virginia                             649                        43.82%
Wyoming                                   124                        43.51%
Hawaii                                    369                        42.03%
California                               44,913                      41.71%
Washington                                2,936                      41.45%
Maryland                                 11,049                      40.81%
Illinois                                 13,229                      40.17%
North Dakota                              120                        40.13%
Idaho                                     564                        38.58%
Oregon                                    1,691                      38.35%
Rhode Island                              1,382                      37.67%
South Carolina                            5,092                      37.55%
Virginia                                  5,045                      37.43%
Arizona                                   7,239                      36.71%
Massachusetts                             5,121                      35.58%
New Jersey                                4,260                      34.94%
Colorado                                  4,274                      34.89%
New Hampshire                             543                        34.63%
Wisconsin                                 2,585                      34.30%
Connecticut                               2,316                      33.96%
Arkansas                                  806                        33.42%
           State or Territory            Number of Clients Current   Percent of Clients Current


Georgia                                            8,572                      33.26%
Kansas                                             709                        32.05%
Vermont                                            113                        32.01%
New Mexico                                         680                        30.59%
New York                                           5,624                      30.20%
Nebraska                                           401                        29.64%
Michigan                                           7,527                      28.91%
Oklahoma                                           748                        28.17%
Ohio                                              11,579                      27.74%
Florida                                           13,541                      27.43%
Delaware                                           750                        27.04%
North Carolina                                     5,830                      26.53%
Missouri                                           3,218                      26.33%
Louisiana                                          952                        26.25%
Minnesota                                          5,684                      25.65%
Maine                                              436                        25.29%
Indiana                                            1,863                      25.11%
Kentucky                                           1,382                      24.29%
Texas                                              5,218                      23.88%
Alabama                                            1,121                      23.38%
Iowa                                               1,044                      23.30%
Tennessee                                          2,387                      21.67%
Mississippi                                        900                        16.32%
Pennsylvania                                       3,274                      13.90%
Puerto Rico                                        257                         8.29%
                                Total:            207,850                     33.81%
  7. States with NFMC Program Clients Over 120 Days Late on
     Mortgage Payment at Intake
    Reference Table 4.15, page 42. Source: NFMC Program Reported Data.


                                Number of Clients Over 120   Percent of Clients Over 120
           State or Territory
                                       Days Late                      Days Late

Puerto Rico                               1,211                        39.08%
Iowa                                      1,419                        31.67%
Minnesota                                 6,396                        28.86%
Pennsylvania                              6,587                        27.97%
Maine                                      464                         26.91%
Indiana                                   1,935                        26.09%
Florida                                   12,836                       26.00%
Ohio                                      10,834                       25.95%
Wisconsin                                 1,896                        25.16%
New York                                  4,614                        24.78%
Vermont                                    87                          24.65%
Louisiana                                  889                         24.51%
North Carolina                            5,355                        24.36%
Kentucky                                  1,363                        23.96%
New Jersey                                2,907                        23.85%
South Carolina                            3,096                        22.83%
Alabama                                   1,086                        22.65%
Arkansas                                   538                         22.31%
Virgin Islands                              2                          22.22%
Illinois                                  7,278                        22.10%
Connecticut                               1,499                        21.98%
Tennessee                                 2,407                        21.86%
Oklahoma                                   578                         21.77%
Nebraska                                   290                         21.43%
New Mexico                                 476                         21.41%
Texas                                     4,671                        21.38%
Mississippi                               1,172                        21.25%
Delaware                                   576                         20.76%
Massachusetts                             2,937                        20.41%
Colorado                                  2,497                        20.38%
District of Columbia                       380                         20.10%
                                         Number of Clients Over 120   Percent of Clients Over 120
           State or Territory
                                                Days Late                      Days Late

Hawaii                                              175                         19.93%
Michigan                                           5,146                        19.76%
Georgia                                            5,078                        19.71%
Nevada                                             2,235                        19.70%
Kansas                                              419                         18.94%
Maryland                                           5,120                        18.91%
Missouri                                           2,200                        18.00%
California                                         19,303                       17.93%
Idaho                                               244                         16.69%
Arizona                                            3,278                        16.62%
New Hampshire                                       255                         16.26%
Virginia                                           2,191                        16.25%
Alaska                                              125                         15.84%
Rhode Island                                        566                         15.43%
Oregon                                              670                         15.20%
West Virginia                                       225                         15.19%
Wyoming                                             43                          15.09%
Washington                                         1,008                        14.23%
Utah                                                303                         13.84%
North Dakota                                         40                         13.38%
South Dakota                                        151                         10.22%
Montana                                             178                         8.15%
                                Total:            137,229                       20.83%
  8. States with NFMC Program Clients Paying more than 75%
     of Income to Principal, Interest, Taxes, and Insurance
       Reference Table 4.16, page 43. Source: NFMC Program Reported Data.


                                Number of Clients Paying more   Percent of Clients Paying more
           State or Territory
                                 than 75% of Income to PITI      than 75% of Income to PITI

Washington                                  2,561                          37.65%
New York                                    5,413                          31.08%
Hawaii                                      260                            30.88%
Wyoming                                      78                            28.26%
Florida                                    12,531                          26.40%
Utah                                        548                            25.72%
California                                 26,150                          25.21%
Rhode Island                                 888                           24.57%
New Jersey                                  2,896                          24.14%
Maine                                       398                            23.73%
North Carolina                              4,876                          23.04%
Arizona                                     4,356                          22.79%
Connecticut                                 1,498                          22.75%
Massachusetts                               3,115                          22.65%
Illinois                                    6,928                          21.75%
Oregon                                       911                           21.64%
Virginia                                    2,828                          21.56%
District of Columbia                        372                            20.69%
Idaho                                        278                           19.52%
Maryland                                    4,949                          19.51%
Pennsylvania                                4,319                          19.03%
Minnesota                                   3,588                          17.61%
New Hampshire                               266                            17.60%
Vermont                                      59                            17.05%
Nevada                                      1,858                          16.64%
New Mexico                                   350                           16.58%
Michigan                                    4,128                          16.45%
Tennessee                                   1,726                          16.26%
Montana                                      351                           16.19%
Colorado                                    1,820                          15.45%
Kentucky                                     827                           15.41%
                                        Number of Clients Paying more   Percent of Clients Paying more
          State or Territory
                                         than 75% of Income to PITI      than 75% of Income to PITI

Georgia                                             3,712                          14.96%
Delaware                                            404                            14.83%
Wisconsin                                           1,079                          14.83%
Louisiana                                            514                           14.63%
Puerto Rico                                          415                           13.76%
Missouri                                            1,623                          13.66%
Texas                                               2,821                          13.55%
Nebraska                                            159                            13.16%
Alaska                                               91                            12.21%
Arkansas                                            280                            12.00%
Indiana                                              813                           11.24%
Kansas                                              237                            11.22%
Virgin Islands                                       1                             11.11%
Alabama                                             507                            10.92%
Ohio                                                4,332                          10.77%
Iowa                                                 436                           10.16%
West Virginia                                       134                             9.31%
South Carolina                                      1,044                           7.80%
Mississippi                                         314                             5.78%
Oklahoma                                             143                            5.48%
North Dakota                                         16                             5.42%
South Dakota                                         69                             4.91%
                               Total:              120,270                         17.35%
  9. States with NFMC Program Clients Paying less than 30% of
     Income to Principal, Interest, Taxes, and Insurance
       Reference Table 4.17, page 44. Source: NFMC Program Reported Data.

                                 Number of Clients Paying less   Percent of Clients Paying less
           State or Territory
                                  than 30% of Income to PITI      than 30% of Income to PITI

Mississippi                                  3,836                          70.63%
North Dakota                                 188                            63.73%
South Dakota                                 894                            63.58%
Oklahoma                                     1,608                          61.61%
West Virginia                                758                            52.68%
Arkansas                                     1,143                          48.97%
South Carolina                               6,323                          47.22%
Indiana                                      3,391                          46.90%
Ohio                                        18,856                          46.87%
Kentucky                                     2,397                          44.65%
Virgin Islands                                4                             44.44%
Louisiana                                    1,554                          44.24%
Kansas                                       924                            43.75%
Nebraska                                     517                            42.80%
Iowa                                         1,825                          42.52%
Alabama                                      1,964                          42.32%
Montana                                      856                            39.48%
Texas                                        8,215                          39.45%
Wyoming                                      108                            39.13%
Missouri                                     4,475                          37.67%
Alaska                                       275                            36.91%
Puerto Rico                                  1,098                          36.42%
Vermont                                      123                            35.55%
Pennsylvania                                 8,007                          35.27%
North Carolina                               7,396                          34.95%
New Mexico                                   731                            34.63%
Georgia                                      8,390                          33.81%
Wisconsin                                    2,443                          33.57%
Tennessee                                    3,561                          33.54%
                                         Number of Clients Paying less   Percent of Clients Paying less
           State or Territory
                                          than 30% of Income to PITI      than 30% of Income to PITI

Michigan                                             8,363                          33.33%
Delaware                                             875                            32.12%
Maine                                                514                            30.65%
Utah                                                 581                            27.26%
Colorado                                             3,167                          26.88%
Minnesota                                            5,130                          25.18%
Idaho                                                358                            25.14%
Illinois                                             7,977                          25.04%
New Hampshire                                        376                            24.88%
Nevada                                               2,625                          23.51%
Arizona                                              4,423                          23.14%
Virginia                                             2,840                          21.65%
Oregon                                               909                            21.59%
Maryland                                             5,327                          21.00%
Connecticut                                          1,318                          20.02%
District of Columbia                                 358                            19.91%
Florida                                              9,049                          19.07%
New York                                             3,244                          18.62%
Massachusetts                                        2,463                          17.91%
Washington                                           1,203                          17.69%
California                                          18,312                          17.65%
New Jersey                                           2,103                          17.53%
Hawaii                                               122                            14.49%
Rhode Island                                         502                            13.89%
                                Total:              173,999                         34.25%
 10. States with NFMC Program Clients with Income less
   than 80% of AMI
Reference Table 4.18, page 44. Source: NFMC Program Reported Data


                                   Number of Clients with      Percent of Clients with
            State or Territory
                                  Income less than 80% AMI   Income less than 80% AMI

South Carolina                             12,146                     89.67%
District of Columbia                        1,676                     89.05%
Mississippi                                 4,469                     81.15%
Maryland                                   21,211                     78.92%
Illinois                                   25,866                     78.89%
Missouri                                    9,535                     78.21%
Minnesota                                  16,880                     76.17%
Connecticut                                 5,069                     75.10%
Georgia                                    18,892                     73.77%
Kansas                                      1,622                     73.49%
Ohio                                       30,361                     72.90%
Virginia                                    9,734                     72.47%
North Carolina                             15,722                     72.16%
Tennessee                                   7,918                     72.04%
Massachusetts                              10,227                     71.67%
Alabama                                     3,352                     70.13%
Indiana                                     5,186                     70.00%
Iowa                                        3,129                     69.98%
Wisconsin                                   5,265                     69.96%
Michigan                                   18,148                     69.75%
New Hampshire                               1,062                     67.99%
Idaho                                        993                      67.92%
Vermont                                      237                      67.14%
Nebraska                                     906                      67.06%
Texas                                      14,602                     66.94%
Colorado                                    8,087                     66.27%
New Mexico                                  1,469                     66.26%
Kentucky                                    3,699                     65.27%
Arizona                                    12,770                     65.06%
Maine                                       1,118                     64.92%
Florida                                    31,280                     64.28%
Oregon                                      2,798                     63.56%
Alaska                                       495                      62.74%
Louisiana                                   2,261                     62.70%
Arkansas                                    1,429                     61.97%
New York                                   11,430                     61.67%
Rhode Island                                2,252                     61.51%
                                            Number of Clients with      Percent of Clients with
             State or Territory
                                           Income less than 80% AMI   Income less than 80% AMI

New Jersey                                          7,459                      61.49%
West Virginia                                        891                       60.69%
Pennsylvania                                        14,192                     60.28%
Delaware                                             1,642                     59.28%
Washington                                          4,040                      57.16%
Montana                                              1,244                     56.96%
South Dakota                                          823                      55.80%
North Dakota                                          165                      55.18%
Wyoming                                               156                      54.74%
Utah                                                 1,181                     54.15%
California                                          57,063                     53.56%
Hawaii                                                457                      52.35%
Oklahoma                                             1,233                     46.55%
Nevada                                               5,177                     45.67%
Puerto Rico                                          1,109                     36.30%
Virgin Islands                                         3                       33.33%
                                  Total:           420,131                     65.14%
  11. States with NFMC Program Clients with Income less
    than 50% of AMI
       Reference Table 4.19, page 44. Source: NFMC Program Reported Data.


                                  Number of Clients with      Percent of Clients with
           State or Territory
                                 Income less than 50% AMI   Income less than 50% AMI

District of Columbia                      1,481                      78.69%
South Carolina                            10,416                     76.90%
Mississippi                               3,450                      62.65%
Maryland                                  15,786                     58.73%
Illinois                                  19,004                     57.96%
Missouri                                  6,471                      53.08%
Georgia                                   13,098                     51.15%
Connecticut                               3,375                      50.00%
Ohio                                      20,171                     48.44%
Virginia                                  6,500                      48.40%
Alabama                                   2,304                      48.20%
Massachusetts                             6,634                      46.49%
Minnesota                                 10,136                     45.74%
North Carolina                            9,898                      45.43%
Kansas                                     978                       44.31%
Tennessee                                 4,847                      44.10%
Vermont                                    155                       43.91%
Wisconsin                                 3,236                      43.00%
Michigan                                  10,585                     40.68%
Arkansas                                   922                       39.98%
Indiana                                   2,945                      39.75%
Louisiana                                 1,430                      39.66%
New Hampshire                              613                       39.24%
New Mexico                                 868                       39.15%
Florida                                   18,906                     38.85%
Colorado                                  4,718                      38.66%
Texas                                     8,422                      38.61%
Iowa                                      1,708                      38.20%
New Jersey                                4,629                      38.16%
Arizona                                   7,413                      37.77%
Kentucky                                  2,138                      37.73%
                                         Number of Clients with      Percent of Clients with
          State or Territory
                                        Income less than 50% AMI   Income less than 50% AMI

Nebraska                                          505                       37.38%
Idaho                                             535                       36.59%
Maine                                             621                       36.06%
New York                                         6,380                      34.42%
West Virginia                                     497                       33.86%
Oregon                                           1,479                      33.60%
Pennsylvania                                     7,756                      32.95%
Alaska                                            255                       32.32%
Rhode Island                                     1,164                      31.79%
Delaware                                          851                       30.72%
Hawaii                                            268                       30.70%
Washington                                       2,051                      29.02%
California                                       30,707                     28.82%
Utah                                              626                       28.70%
Montana                                           618                       28.30%
Wyoming                                            79                       27.72%
North Dakota                                       82                       27.42%
Nevada                                           2,901                      25.59%
South Dakota                                      377                       25.56%
Oklahoma                                          612                       23.10%
Virgin Islands                                     2                        22.22%
Puerto Rico                                       565                       18.49%
                               Total:           262,168                     39.79%
National Foreclosure Mitigation Counseling Program Evaluation

       Preliminary Analysis of Program Effects

                     November 2009

                            Prepared by
                             Neil Mayer
                           Peter A. Tatian
                          Kenneth Temkin
                         Charles A. Calhoun


                                With
                           Randy Rosso
                           Kaitlin Franks
                            David Price
                         Elizabeth Guernsey


                            Prepared for
                     NeighborWorks® America



                         November 2, 2009




                         The Urban Institute
                         2100 M Street, NW
                       Washington, DC 20037
                     UI project no. 08295-000-03
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects



                                                   Table of Contents

 Acknowledgments.............................................................................................. v

 Executive Summary ......................................................................................... vii

 Introduction......................................................................................................... 1

 Data Used in the Analysis.................................................................................. 5
    NFMC Program Production Data...................................................................................5
    LPS Applied Analytics Loan Performance Data ............................................................6
    Home Mortgage Disclosure Act Data ............................................................................6
    NFMC Analysis Sample.................................................................................................7
    Non-NFMC Analysis Sample .........................................................................................8
    Outcome Variables ......................................................................................................14
    Control Variables .........................................................................................................17

 Models of Program Effects .............................................................................. 21
    Potential Modeling Issues............................................................................................21
    Modeling Approach......................................................................................................28

 Findings ............................................................................................................ 31
    NFMC Program’s Effect on Foreclosure Avoidance ....................................................31
    NFMC Program’s Effect on Foreclosure Cures ...........................................................35
    NFMC Program’s Effect on Loan Modifications...........................................................37

 Conclusion ........................................................................................................ 41

 References ........................................................................................................ 43

 Appendix A: HMDA Matching Methodology................................................. A-1

 Appendix B: Descriptive Statistics for Model Explanatory Variables....... B-1

 Appendix C: Parameter Estimates for Hazard Models of
 Time to Foreclosure – NFMC Only ................................................................ C-1


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 Appendix D: Parameter Estimates for LOGIT Model of
 Foreclosure Cure – NFMC vs. Non-NFMC .................................................... D-1

 Appendix E: Parameter Estimates for LOGIT Model of
 Foreclosure Cure – NFMC Only......................................................................E-1

 Appendix F: Parameter Estimates for OLS Regression Models of
 Reduction in Monthly Payment for Loans Receiving a Modification –
 NFMC vs. Non-NFMC.......................................................................................F-1

 Appendix G: Parameter Estimates for OLS Regression Models of
 Reduction in Monthly Payment for Loans Receiving a Modification –
 NFMC Only ...................................................................................................... G-1




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                                                           List of Tables


Table 1: Comparison of NFMC and Non-NFMC Analysis Samples by
Loan Characteristics as of January 2008....................................................................................12
Table 2: Comparison of NFMC and Non-NFMC Analysis Samples by State .............................13
Table 3: Explanatory Variables Used in Models .........................................................................19
Table 4: NFMC Loans In Foreclosure Between January and December 2008 ..........................22
Table 5: Descriptive Analysis of NFMC Loans Not In Foreclosure Prior to Counseling..............32
Table 6: Hazard Model Estimates of Counseling Effects on Likelihood of Foreclosure,
NFMC-Counseled Loans Only ....................................................................................................33
Table 7: LOGIT Model Odds Ratio Estimates for Counseling Effects on Likelihood of
Foreclosure Cure ........................................................................................................................36
Table 8: OLS Regression Model Estimates for Counseling Effects on
Dollar Reduction in Monthly Payment Resulting from Loan Modifications..................................39
Table 9: OLS Regression Model Estimates for Counseling Effects on
Percentage Reduction in Monthly Payment Resulting from Loan Modifications.........................40




                                                          List of Figures


Figure 1: Percentage of Loans Not in Counseling that are Current,
NFMC and Non-NFMC Samples, January to December 2008 ...................................................24




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ACKNOWLEDGMENTS


        The authors would like to thank the following persons for their help in preparing this
report: Randy Rosso, Kaitlin Franks, David Price, Elizabeth Guernsey, and Leah Hendey of the
Urban Institute for assistance in preparing the NFMC and LPS data and in carrying out the
analyses described in this report; Dr. George Galster of Wayne State University for very helpful
comments on the analysis methods and the interpretation of results; comments from a group of
researchers convened by NeighborWorks® America to provide feedback on an earlier version of
this analysis; Barbara Richard and Tina Trent of NeighborWorks® America for comments and
edits of earlier drafts; Trey Barnes and Kostya Gradushy of LPS Applied Analytics for their
assistance in matching the NFMC and LPS loan records; and Tim Ware of the Urban Institute
for administrative support and help in preparing this document.




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EXECUTIVE SUMMARY


        The National Foreclosure Mitigation Counseling (NFMC) program is a special federal
appropriation, administered by NeighborWorks® (NW) America, that is designed to support a
rapid expansion of foreclosure intervention counseling in response to the nationwide
foreclosure crisis. As this is a federal appropriation, NW America must inform Congress and
other entities of the NFMC program’s progress. The Urban Institute (UI) was selected by NW
America to undertake a two-year evaluation of the NFMC program.
         This report presents the results of preliminary analyses that attempt to measure the
effects of the NFMC program on counseled homeowners. We conducted a multivariate
statistical analysis on a sample of close to 61,000 loans to answer the following questions about
the NFMC program’s performance through December 2008.
           •   Did the NFMC program help homeowners avoid foreclosure?
           •   Did the NFMC program help homeowners cure an existing foreclosure?
           •   Did the NFMC program help homeowners receive loan modifications that resulted
               in lower monthly payments than they would have otherwise received without
               counseling?
        This preliminary evaluation of program effects indicates that the initial answer to these
three questions is “Yes,” although the magnitude of the effects varies depending on the
particular outcome. As detailed further in this report:

       •   The NFMC program somewhat reduced the likelihood that counseled homeowners
           would end up in foreclosure. We estimated that the NFMC program helped
           approximately 880 clients avoid going into foreclosure through December 2008. That
           is, the number of homeowners who were moderately delinquent (2 or 3 months) and
           experienced a foreclosure would have been 4,975 compared to the 4,095 actual
           foreclosures estimated. By helping to avoid these foreclosures, the NFMC program
           created potential cost-savings of $33 million between January and December 2008.

       •   The NFMC program was even more effective at helping homeowners cure an
           existing foreclosure. Many NFMC clients entered counseling already in foreclosure
           (22 percent), or entered foreclosure after starting counseling (11 percent). During the
           first year of the program, counseled homeowners were about 1.6 times as likely to



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           get out of foreclosure, and avoid a foreclosure completion, than they would have
           been had they not received NFMC counseling.

       •   Loan modifications received by NFMC clients resulted in significantly lower mortgage
           payments than would have been received without the help of the program. Lower
           monthly payments may help reduce the likelihood of a subsequent recurrence of
           borrower mortgage problems. On average, we estimated that NFMC clients who
           received loan modifications reduced their monthly payments by $454 more than they
           would have without NFMC counseling.
        Overall, our analysis of the NFMC program suggests that the program is having its
intended effect of helping homeowners facing loss of their homes through foreclosure. In
subsequent analyses, to be presented in the evaluation final report, we will estimate the
program’s impact on clients who received counseling services in 2009 and also observe loan
performance over a longer period of time, which will allow for a better measurement of the
overall impact of the NFMC program.




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INTRODUCTION


         The National Foreclosure Mitigation Counseling (NFMC) program is a special federal
appropriation, administered by NeighborWorks® (NW) America, that is designed to support a
rapid expansion of foreclosure intervention counseling in response to the nationwide foreclosure
crisis. The NFMC program seeks to help homeowners facing foreclosure by providing them with
much needed foreclosure prevention and loss mitigation counseling. NW America distributes
funds to competitively selected Grantee organizations, who in turn provide the counseling
services, either directly or through Subgrantee organizations.
        As this is a federal appropriation, NW America must inform Congress and other entities
of the NFMC program’s progress. The Urban Institute (UI) was selected by NW America to
undertake a two-year evaluation of Round 1 of the NFMC program.
         This report presents the results of preliminary analyses that attempt to measure the
effects of the NFMC program on counseled homeowners. In previous analyses undertaken as
part of this evaluation, we reported, along with descriptive information on the characteristics of
homeowners and their mortgages, data on particular loan outcomes for persons served by the
NFMC program. These previously reported outcomes included (1) the share of NFMC clients
who received a loan modification and, for clients who received a loan modification, the type of
modification and (2) the last observed status for clients’ loans. These data indicated that about
11 percent of NFMC clients served through May 2009 received a loan modification, and that 27
percent of all NFMC clients had, as their loan status of May 2009, either entered or completed
the foreclosure process.
        While these descriptive statistics provide useful information about what happens to
counseled homeowners, they do not answer the question that is of real interest from an
evaluation perspective: What would have happened to NFMC clients had they not used the
services offered by the program’s Grantees? If the NFMC program did not exist, presumably
some NFMC clients would have not taken any action to avoid foreclosure. Others might have (1)
attempted to self-cure their delinquency, (2) contacted their mortgage servicer to negotiate a
loan modification on their own, or (3) used the services of other counseling agencies not funded
by the NFMC program. Some persons would have been successful in avoiding foreclosure,
while others would not.
        Furthermore, even with NFMC-provided counseling, it is not reasonable to expect that all
foreclosures could be avoided. For instance, some homeowners are in homes that they simply


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cannot afford. While counselors may be able to help some of these clients negotiate better
outcomes than foreclosure, some foreclosures are likely inevitable in such cases.
         Therefore, the supposition of this evaluation is that the NFMC program has a positive
effect if it results in better outcomes for clients than would have been achieved without the
availability of services provided by NFMC Grantees. The NFMC program’s major objective is to
help homeowners avoid foreclosure. To evaluate the effectiveness of the program, we
conducted analyses to determine the following:

           •   Did the NFMC program help homeowners avoid foreclosure?
           •   Did the NFMC program help homeowners cure an existing foreclosure?
           •   Did the NFMC program help homeowners receive loan modifications that resulted
               in lower monthly payments than they would have otherwise received without
               counseling?
        To answer these questions, we used a series of multivariate models to determine the
impact of counseling in each of the cases listed above. The models were estimated on a
representative sample of the approximately 300,000 homeowners who received NFMC
counseling during the first twelve months of the program (January through December 2008) and
a comparison sample of non-NFMC counseled homeowners. Our data included detailed
characteristics of the mortgage loans and borrowers, which were used to control for differences
between the two samples, as well as information on the performance of mortgage loans
(foreclosure and delinquency status) through December 2008. The size of the NFMC analysis
sample is approximately 61,000 loans.
        This preliminary evaluation of program effects indicates that the initial answer to each of
these questions is “Yes,” although the magnitude of the effects varies depending on the
particular outcome. As detailed further in this report:

       •   The NFMC program somewhat reduced the likelihood that counseled homeowners
           would end up in foreclosure. We estimated that the NFMC program helped 880
           clients avoid going into foreclosure through December 2008. That is, the number of
           homeowners who were moderately delinquent (2 or 3 months) and experienced a
           foreclosure would have been 4,975 compared to the 4,095 actual foreclosures
           estimated. By helping to prevent these foreclosures, the program created potential
           cost-savings of $33 million in foreclosure avoidance between January and December
           2008.

       •   The NFMC program was much more effective at helping homeowners cure an
           existing foreclosure. Many NFMC clients entered counseling already in foreclosure
           (22 percent), or entered foreclosure after starting counseling (11 percent). During the
           first year of the program, counseled homeowners were about 1.6 times as likely to


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           get out of foreclosure, and avoid a foreclosure completion, than they would have
           been had they not received NFMC counseling.

       •   Loan modifications received by NFMC Grantee clients resulted in significantly lower
           mortgage payments than would have been received without the help of the program.
           Lower monthly payments may help reduce the likelihood of a subsequent recurrence
           of borrower mortgage problems. On average, we estimated that NFMC clients who
           received loan modifications reduced their monthly payments by $454 more than they
           would have without NFMC counseling.
         In the following sections of this report we discuss the results from models that estimate
the NFMC program’s effects on the three program objectives listed above: preventing
foreclosures, curing foreclosures, and payment reductions from loan modifications. This is
followed by an explanation of the methodology used, including the data and how the control
group was created; a discussion of the methodological challenges inherent in a statistical study
of this nature, how we compensated for these challenges and the possible implications for our
results. The report concludes with a brief overview of the preliminary policy conclusions that
might be drawn from our findings.
        We emphasize again that these results are preliminary, based on an initial analysis of
data for only the first program year. The final analysis, to be presented in June 2010, will include
estimates of program effects for all homeowners counseled in Round 1 of the NFMC program
and will track outcomes over a longer period of time.




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DATA USED IN THE ANALYSIS


         Three main data sources were used in the outcomes modeling analysis that is described
in this report. These sources include administrative data collected by NW America from NFMC
program Grantees on counseled homeowners, as well as two national data sources on
mortgage loans and borrowers in the U.S. In this section, we describe these three data sources
and explain how they were used to create a sample of NFMC counseled homeowners and a
comparison sample of non-counseled homeowners for our multivariate analysis. We also
describe the three outcome variables (time to foreclosure, foreclosure cure, and monthly
payment reduction from loan modification) and the other control variables used in our models,
including an explanation of how they were constructed using the available data.


NFMC Program Production Data
        NFMC program Grantees are required to provide client-level data (referred to as
production data), along with quarterly reports on aggregate activity toward overall goals
established under the grant award. The production data are submitted by Grantees on an
ongoing basis through an electronic submission system. Production data consist of a record for
each “counseling unit” provided by the Grantee or Subgrantee to an individual homeowner.
Since an individual homeowner may receive both Level 1 and Level 2 counseling, these
sessions are counted and referred to as “units” of produced counseling.1
        The production data provide the list of homeowners who have received NFMC program
counseling in some form and, therefore, constitute the treatment group for our analysis of
program impacts. The data consist of information on the counseled homeowner, including
identifying data (name, address), demographic characteristics, and household income;
information on the client’s mortgage loan, including the current servicer, loan terms, and current
default status; and information on the type and amount of foreclosure mitigation counseling
received.


         1
            The NFMC program recognizes three distinct levels of counseling services. In Level 1 counseling, the
NFMC Grantee or Subgrantee conducts a client intake process and develops a budget and a written action plan for
the client. After Level 1 counseling is completed, it is up to the client to follow through with any activities on the action
plan. In Level 2 counseling, the Grantee or Subgrantee verifies the client's budget and takes additional steps to
obtain solutions outlined by the action plan. Level 3 counseling is when Level 1 and Level 2 counseling are completed
in succession by the same Grantee or Subgrantee.


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        Grantees also can report outcomes for each counseling unit, although outcome reporting
is not required for all counseling units in the production data. As discussed in a previous report
on the NFMC program, 28 percent of Level 1 counseling units in the first three months of the
program did not have a further reported outcome (Mayer et al. 2008: 46). Even for Level 2 and 3
counseling units, the Grantee-reported outcome might be “initiated forbearance agreement” (12
percent of first quarter counseling units) or “counseled and referred to another agency” (11
percent), which still leaves open the question as to whether the forbearance agreement was
sufficient to avoid foreclosure.
        Given these limitations on Grantee-reported outcomes, to model the impacts of the
NFMC program on key outcomes of interest we needed to match the homeowners from the
production data with external data on mortgage performance. In addition, to model the “what if”
case of households who did not receive counseling, we needed an additional sample of loans
for non-NFMC program participants, including their outcomes regarding foreclosure. We used
data from LPS Applied Analytics, Inc. and from the Home Mortgage Disclosure Act, therefore, to
supplement the production data.


LPS Applied Analytics Loan Performance Data
        LPS Applied Analytics, Inc., (LPS) is a commercial company that compiles home
mortgage performance data from large loan-servicing organizations. These data were originally
compiled by McDash Analytics, Inc., but that company was acquired by LPS in 2008. As of
December 2008, the LPS database covered nearly 60 percent of the active residential
mortgages in the United States. LPS compiles loan-level data from mortgage servicers,
including nine of the ten largest servicers in the U.S., and tracks several aspects of loan
performance for active mortgage loans. NW America has negotiated an agreement to purchase
LPS’s loan level database, which has approximately 30 million mortgage loan records, for use in
this study.
        The LPS data include numerous characteristics of each mortgage loan, including the
borrower’s FICO score at loan origination, the original loan amount, the current interest rate of
the loan, the loan type (fixed rate, adjustable rate, option ARM), and the ZIP code of the
mortgaged property. The data also track various loan performance indicators, including when a
borrower defaulted on a loan and whether the loan has gone into foreclosure. The LPS loan
performance data are updated monthly, which permits tracking of delinquency and foreclosure
status on a month-to-month basis.


Home Mortgage Disclosure Act Data
         The Home Mortgage Disclosure Act (HMDA), enacted in 1975, requires most lending
institutions to report detailed data on mortgage application outcomes and approved loans to the
Federal Financial Institutions Examination Council. HMDA data are routinely used to determine


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if housing credit needs are being met in particular neighborhoods and to identify discriminatory
lending patterns. HMDA data are released publicly on an annual basis and the public data
include the fields such as the race, sex, and income of the borrower; the loan amount and type;
and the census tract of the mortgaged property. For this analysis, we had access to national
loan-level HMDA data from 2002 through 2007.
        We used the HMDA data to link additional borrower characteristics with the LPS data.
Furthermore, since census tract is reported on the HMDA data, by combining LPS and HMDA
records we were able to link additional census tract information for both counseled and non-
counseled loans. These census tract characteristics allowed us to control for neighborhood
effects in our models.


NFMC Analysis Sample
        Data for this analysis was drawn from 300,685 NFMC “counseling unit” records reported
to NW America, as of February 9, 2009, for clients who received counseling services between
January and December 2008. A counseling unit refers to a client who received one or more
counseling sessions at a given level of service from the same Grantee. It is possible, however,
for a person to receive counseling at different levels from the same Grantee or to receive
counseling from different Grantees. These would be reported in the NFMC program production
data as separate counseling units. We were able to filter out multiple instances of counseling
provided to the same homeowner, however, through our match with the LPS database.2
         The NFMC counseling unit records were matched to the LPS database by the loan
servicer name and the servicer’s loan identification number. While these two pieces of
information are included in the data reported by NFMC Grantees, they are not included in the
data provided by LPS for the NFMC evaluation. LPS does, however, maintain this information in
its internal database. Therefore, LPS was able to match the loan servicer and loan identification
number reported by the NFMC Grantees to the corresponding fields in their database and
provide the internal loan identification number for those loans. This information was used to
append the LPS loan information to the NFMC counseling records.
         The match between the NFMC and LPS databases was not 100 percent successful.
First, the LPS database covers about 60 percent of U.S. mortgages, so some NFMC-counseled
loans may simply not be in the database. In addition, some loans in the LPS database do not
contain real servicer loan identification numbers, but rather an internal number generated by the
servicer solely for LPS reporting purposes. These loans could not, therefore, be matched.3 In

         2
            About 10 percent of the matched LPS loans corresponded to two different NFMC-reported counseling
units; less than 0.3 percent to three or four counseling units.
         3
          The lack of real loan identification numbers for particular servicers is a possible source of selection bias in
our sampling methods. This is discussed further in the Potential Modeling Issues section (p. 21).


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addition, errors in reporting or recording data in either the LPS or NFMC databases would result
in match failures. While all of these issues likely affected the ability to match loans between the
NFMC and LPS databases, it is not possible to determine accurately how much each factor
contributed to lowering the overall match success rate.
        The matching process resulted in 72,251 unique LPS loans matched to NFMC
counseling units, a match rate of 24 percent.4 Although not randomly selected, a comparison of
the NFMC-LPS matched loans with the NFMC population revealed that, based on key
observable characteristics such as borrower age, borrower income, type of mortgage, amount of
monthly payment, loan delinquency status, and level of counseling provided, the matched loans
constitute a representative sample of all the NFMC clients counseled in the first twelve months
of the program (Mayer et al. 2009: appendix D).
        As noted earlier, HMDA data were also used in the analysis to add consistent race,
ethnicity, and census tract characteristics to the loan records. Since these variables were seen
as potentially key predictors of the foreclosure outcomes that we were studying, we felt that it
was important to include them in our models. Since our HMDA data only included loans
originated between 2002 and 2007, we were limited to matching HMDA characteristics to NFMC
counseled loans of this vintage. Fortunately, the vast majority of NFMC-counseled mortgages
(95 percent) were originated between 2002 and 2007.
        The methodology for matching the loan records to the HMDA data is described in
Appendix A. Because there were no unique identifiers that could be used to match data directly
between the two sources, we matched on several loan characteristics, including ZIP code,
origination year, and original loan amount. Because our analysis required an exact match, we
excluded any loans where the matching was ambiguous; that is, where there was more than
one HMDA loan that met the match criteria for a given NFMC/LPS loan. Despite these stringent
matching requirements, a much higher match rate was achieved than with the LPS match. Out
of the original 72,251 LPS-matched loans, 60,892 were successfully matched to HMDA records
and were therefore available for use in the multivariate analysis as the NFMC analysis sample.


Non-NFMC Analysis Sample
        As noted in the introduction, the performance of the NFMC program should be assessed
relative to what would have happened had counseling services provided by NFMC not been
available. To make this comparison, we selected a group of non-counseled homeowners


         4
          In a very small number of cases (15) the same NFMC counseling unit matched against multiple LPS loan
records. These counseling units were deleted from the analysis. In a larger share (15,446 counseling units), the same
LPS loan was matched to multiple counseling unit records. In these cases, the counseling unit with the highest level
of counseling service provided was retained. In cases where two or more units had the same highest level of
counseling, the record with the latest counseling intake date was kept.


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     NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
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against which performance of loans for NFMC-counseled homeowners can be compared. The
method we used to draw the comparison sample attempted to match selected characteristics of
loans in the NFMC sample. In addition, we used multivariate analysis to control for any
differences between the two sets of loans that might affect the outcomes of interest.
       The “gold standard” for evaluation analysis is an experimental design with random
assignment of treatment. In this study design, homeowners seeking counseling services would
be randomly assigned to two groups – one that would receive counseling services and one that
would not. The two groups would then be followed and any differences in outcomes between
the two could reasonably be attributed to the effect of the counseling.
         The virtue of the experimental design is that, if done properly, the two groups should be
indistinguishable from each other in both observable and unobservable characteristics, except
for the fact that one group received counseling. The NFMC program was not set up as an
experimental design, however, so differences between the counseled homeowners and the
comparison group of non-counseled homeowners must be controlled for using statistical
methods. In this analysis, therefore, we used three different multivariate modeling techniques
(proportional hazard models, logistic regression, and ordinary least squares regression), which
allowed us to control for differences in characteristics between the counseled and non-
counseled loans.
        For the purposes of modeling program effects, we selected a group of mortgage loans
that did not receive NFMC counseling to serve as a “comparison sample” in our model
estimations. One possible method for selecting the comparison sample would have been to
choose randomly a portion of loans among those LPS database records that were not matched
to NFMC loans. We chose not to use this approach because NFMC clients have characteristics
that are very different from the overall population of residential mortgages. For one, NFMC
clients are much more likely to be delinquent on their loans than homeowners in general. Close
to 75 percent of NFMC clients were delinquent on their mortgage when they enter into
foreclosure prevention counseling, compared to an overall delinquency rate of 9.73 percent for
all mortgages as of December 31, 2008 (LPS 2009). As a consequence, a randomly chosen
sample of all U.S. mortgages that did not receive NFMC counseling would almost certainly yield
a group of loans that was quite different from the NFMC-counseled population in a number of
important respects.
        While many of these variations between the NFMC loans and a random sample of non-
NFMC loans could have been controlled for in the subsequent modeling, the large differences in
the distributions of the control variables would reduce the efficiency of the model estimates, as
well as possibly increase the impact of selection bias. We discuss the issue of selection bias in
the Potential Modeling Issues section later in this report (p. 21). The issue of efficiency of the
model estimates can be described as follows: Suppose that almost all of the NFMC loans were
adjustable rate mortgages and almost all of the non-NFMC loans were fixed rate. It would be


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very difficult (if not impossible) to separate statistically the effect of the NFMC program on
foreclosures from the effect of the mortgage type on foreclosures since there would be very few
loans of the same type that were in different treatment groups. The problem, therefore, is not
that we would get the wrong answer regarding NFMC impacts, but rather that we would get no
answer at all. By having NFMC and non-NFMC samples that are relatively similar on observable
borrower and loan characteristics, our models will be more likely to separate program effects
from other statistical “noise.”
        Therefore, instead of a random sample, we chose a comparison sample by
implementing a “propensity scoring model” to match the characteristics of the NFMC and non-
NFMC samples as closely as possible on several important dimensions. A propensity scoring
model is a technique for drawing matched data samples based on a set of common
characteristics.5 For each loan in the NFMC sample, the propensity scoring model found the
closest match among the non-NFMC loans in the database. The propensity scoring model
matched NFMC and non-NFMC samples using the following characteristics as of January 2008,
the start of the NFMC program observation period:
                 •   Year of loan origination.
                 •   Current interest rate.
                 •   Whether the loan was fixed or adjustable rate.
                 •   Months delinquent.
                 •   Whether the loan was in foreclosure.
                 •   Whether the loan was in the portfolio of Fannie Mae or Freddie Mac; was
                     held in a private portfolio; was a private securitized loan; or was owned by
                     another entity.
                 •   State where the mortgaged property was located.
        The propensity scoring model was run against the 60,892 NFMC analysis sample and
149,263 LPS loans originated between 2002 and 2007 that were not matched to NFMC records
but that were matched to HMDA (using the methods described in Appendix A). The 149,263
LPS loans were presumed not to have received NFMC counseling. Nonetheless, we must
acknowledge that some of these homeowners may have received foreclosure counseling from
some other program. It is also possible that some may have received counseling from the
NFMC program itself but could not be matched to the LPS database because they were not in
the LPS universe of loans, because they were in the portfolio of a servicer that did not report
loan identification numbers to LPS, or because of data errors in the matching variables.


        5
           We used a version of the propensity scoring match algorithm implemented as a SAS macro by Parsons
(no date) to select our comparison sample.


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         As shown in tables 1 and 2, the NFMC sample and the non-NFMC sample selected by
the propensity scoring model match very well on many of the selected characteristics. The
largest discrepancies are in the shares of adjustable rate loans and private securitized loans
and in the current interest rate, which are all higher in the NFMC sample. We controlled for
differences in these characteristics in the multivariate analysis. The foreclosure and delinquency
statuses of the two sets of loans as of January 2008 were quite similar, however, which
indicates that the two samples match well on the extent to which borrowers were in difficulty
prior to the start of the NFMC program.
       We emphasize, however, that the success of our modeling does not depend on the
NFMC and non-NFMC samples matching exactly. To the extent that we are controlling for
characteristics that affect our foreclosure outcomes, differences between the two samples
should not bias our modeling results. There are, nonetheless, some possible sources of bias in
our data that we address in the Potential Modeling Issues section of this report (p. 21).




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 Table 1: Comparison of NFMC and Non-NFMC Analysis Samples by
 Loan Characteristics as of January 2008

                                                          NFMC Sample         Non-NFMC Sample
 Number of loans                                                  60,892                    60,892


 Percent by loan origination year
 2002                                                                 2.7                       2.7
 2003                                                                 6.0                       5.8
 2004                                                                 9.0                       8.9
 2005                                                                22.1                     22.3
 2006                                                                37.1                     37.5
 2007                                                                23.1                     22.9


 Average interest rate (%)                                            7.4                       6.7
 Percent of adjustable rate loans                                    47.6                     28.1


 Percent by investor
 Fannie Mae/Freddie Mac                                              29.6                     24.9
 Private securitized                                                 48.9                     32.0
 Private portfolio                                                   10.9                     14.3
 Other                                                               10.6                     28.8


 Percent by delinquency status
 Current                                                             62.7                     62.5
 1 month                                                             13.3                     13.3
 2 months                                                             7.0                       6.9
 3 months                                                             4.1                       4.2
 4+ months                                                           12.8                     13.1


 Percent in foreclosure                                               5.3                       5.7

 Source: Authors’ calculations from NFMC program data and LPS loan performance data for Jan. 2008.




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 Table 2: Comparison of NFMC and Non-NFMC Analysis Samples by State
                                                     NFMC Sample       Non-NFMC Sample

 Number of loans                                            60,892                 60,892

 Percent by state
     Alabama                                                   0.7                      0.7
     Alaska                                                    0.1                      0.1
     Arizona                                                   3.1                      3.2
     Arkansas                                                  0.3                      0.3
     California                                               18.5                     18.6
     Colorado                                                  2.9                      2.7
     Connecticut                                               1.3                      1.1
     Delaware                                                  0.5                      0.4
     District of Columbia                                      0.4                      0.4
     Florida                                                   7.5                      7.9
     Georgia                                                   4.2                      4.3
     Hawaii                                                    0.1                      0.1
     Idaho                                                     0.1                      0.1
     Illinois                                                  5.0                      5.0
     Indiana                                                   1.1                      1.1
     Iowa                                                      0.8                      0.8
     Kansas                                                    0.4                      0.4
     Kentucky                                                  1.0                      1.0
     Louisiana                                                 0.4                      0.5
     Maine                                                     0.2                      0.2
     Maryland                                                  5.1                      5.0
     Massachusetts                                             2.4                      2.3
     Michigan                                                  4.7                      5.0
     Minnesota                                                 1.7                      1.6
     Mississippi                                               0.6                      0.7
     Missouri                                                  2.3                      2.3
     Montana                                                   0.1                      0.1
     Nebraska                                                  0.2                      0.2
     Nevada                                                    2.5                      2.6
     New Hampshire                                             0.3                      0.3
     New Jersey                                                2.1                      2.2
     New Mexico                                                0.3                      0.3
     New York                                                  2.8                      2.8
     North Carolina                                            2.5                      2.5
     North Dakota                                              0.0                      0.1
     Ohio                                                      5.4                      5.1
     Oklahoma                                                  0.5                      0.6
     Oregon                                                    0.6                      0.5
     Pennsylvania                                              4.0                      3.8
     Rhode Island                                              0.8                      0.8
     South Carolina                                            1.1                      1.1
     South Dakota                                              0.2                      0.2
     Tennessee                                                 2.0                      2.0
     Texas                                                     3.6                      3.6
     Utah                                                      0.3                      0.3
     Vermont                                                   0.0                      0.0
     Virginia                                                  2.5                      2.6
     Washington                                                1.1                      1.1
     West Virginia                                             0.2                      0.2
     Wisconsin                                                 1.3                      1.3
     Wyoming                                                   0.0                      0.0


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Outcome Variables
      Our preliminary analysis of the effects of the NFMC program focused on three key
outcomes of interest:
          •   Did the NFMC program help homeowners avoid foreclosure?
          •   Did the NFMC program help homeowners cure an existing foreclosure?

          •   Did the NFMC program help homeowners receive loan modifications that resulted
              in lower monthly payments than they would have otherwise received without
              counseling?
      To measure these effects, we used the data sources described above to construct
outcome variables corresponding to each of the above questions for both the NFMC and non-
NFMC loan samples.


       Foreclosure avoidance
         Foreclosure is a common outcome in modeling loan performance (Coulton, et al. 2008;
Elmer and Seelig 1998; Gardner and Mills 1989; Newberger 2006; Quercia, McCarthy, and
Stegman 1995; Quercia, Stegman, and Davis 2005). Foreclosure can be a drawn out process,
often lasting several months or more, by which a lender seeks to sell a mortgaged property to
recover an unpaid debt obligation. The foreclosure process usually is initiated by the loan
servicer when the homeowner is three months behind, or more, on monthly mortgage
payments, but individual servicers and lenders have different procedures for deciding when to
start a foreclosure process in particular circumstances. In addition, states and localities have
differing laws and regulations covering the foreclosure process, which affect the initiation,
duration, and completion of a foreclosure.
        Our first foreclosure outcome of interest is foreclosure avoidance; that is, successfully
avoiding the start of the foreclosure process by the loan servicer. Homeowners who were
current on their mortgage payments, or delinquent but not sufficiently so to have received a
foreclosure notice, were the eligible population for foreclosure avoidance in this analysis. Using
the loan performance data from LPS for all homeowners in the analysis samples who were not
in foreclosure as of January 2008, we tracked whether a foreclosure start was recorded
between January and December 2008. Homeowners who did not have a foreclosure start were
deemed to have avoided foreclosure during the twelve month observation period.
        If a foreclosure start was reported, we measured the number of days from the start of the
observation period (January 1, 2008) to the date when the foreclosure was initiated. For the
foreclosure avoidance analysis, we modeled the “time to foreclosure” (in days) as the outcome
of interest. The NFMC program would be deemed to have a positive effect on this outcome if




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counseled homeowners experienced a longer average time to foreclosure than non-counseled
homeowners.


       Foreclosure cure
        A second key outcome of interest is whether, once a foreclosure process has started,
NFMC counseling was effective in helping homeowners avoid losing their home to a foreclosure
sale. We refer to this outcome as a “foreclosure cure.” In ideal circumstances, the homeowner
would be able to remain in the home by becoming current on their loan, possibly through a loan
modification or refinancing. We also counted as a foreclosure cure, however, cases where the
homeowner lost the home through a property sale, including a short sale, because this outcome
is considered, in general, more advantageous to the client than a foreclosure sale, which would
have a severely negative impact on the borrower’s credit score.
         The population of loans eligible for a foreclosure cure in this analysis were all those that
were in the foreclosure process sometime between January and December 2008, including
those whose foreclosure may have started prior to January 2008. For NFMC clients, this
included both loans that entered foreclosure prior to the homeowner seeking counseling and
those that entered foreclosure after starting counseling. In each month from the foreclosure
start, we track the LPS data to see if the loan exited foreclosure without ending up in foreclosure
sale or as a real estate owned (REO) property. As noted above, cases where the loan is paid in
full through a refinancing or property sale are also counted as a foreclosure cure. (The LPS data
do not permit allow one to distinguish between full price sales, short sales, and mortgage
refinancings.) To account for variation in the length of current foreclosure spells, we also
measured the number of months that the loan had been in foreclosure and included this as an
explanatory variable in our models of foreclosure cure.


       Reduction in monthly payment from loan modifications
        Previous analyses of outcome data for the NFMC program have highlighted the
importance of loan modifications in achieving successful outcomes for troubled homeowners.
NFMC-counseled homeowners who received loan modifications were less likely to either have
their loan go into foreclosure or to have a foreclosure completed after the start of counseling,
compared to NFMC clients who did not receive a loan modification (Mayer, Temkin, and Tatian
2009). Other research on loan performance has also highlighted a positive relationship between
better mortgage outcomes (such as foreclosure avoidance and reduced delinquency recidivism)
and significant reductions in monthly loan payments (Office of the Comptroller of the Currency
and Office of Thrift Supervision 2009). Therefore, to the extent that NFMC Grantees were able
to help homeowners obtain more beneficial loan modifications from lenders, one would expect
to see improved client outcomes, making payment reduction a potentially important intermediate
outcome of the NFMC program.


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       While the LPS data track several characteristics of the mortgage loan, including current
monthly payment6 and interest rate, there is no specific flag in the database to indicate a loan
modification. Based on our analysis of the LPS data, we created a series of criteria to identify
loan modifications based on changes in the monthly loan characteristics.
         1. Mortgage modified by lowering interest rate only: For fixed rate mortgages, if the
            interest rate was reduced from one month to the next, by any amount, this was
            identified as a lower interest rate modification.
             If the loan was an adjustable rate mortgage (ARM), we determined whether the
             reduction in interest rate between one month and the next exceeded a pre-
             determined threshold and, if so, identified this as a lower interest rate modification:7
                  •    For ARMs with one-month reset periods where the next payment due date
                       was one month after the previous payment due date (that is, where the
                       borrower either remained current or stayed the same number of months
                       delinquent as they were previously), the threshold was 100 basis points.
                  •    For ARMs using the COFI index (San Francisco Eleventh District Cost of
                       Funds8), the threshold was 200 basis points.
                  •    For all other ARMs, the threshold was 300 basis points.
         2. Mortgage modified by increasing loan term only: Remaining term of the loan
            increased from one month to the next.
         3. Mortgage modified by lowering loan principal only: If the difference between the
            previous principal balance and the current principal balance was at least $5,000
            greater than the maximum possible change in principal balance within the loan’s
            terms, the loan was flagged as a lower loan principal modification. Only loans that
            were not paid in full and did not have a foreclosure completed in the month of the
            principal drop were flagged as a lowered-principal modification.



         6
            Monthly payment includes amounts paid by the homeowner to the loan servicer for mortgage principle,
interest, taxes, and insurance.
         7
           The LPS data do not provide enough information to determine, with certainty, when an ARM should reset
and how much the reset payment should be. Therefore, some observed ARM rate reductions may result from the
index declining from its previous reset period and not from a loan modification. Because of this, to identify interest
rate modifications we used a conservatively large threshold, represented by the maximum decline in an index
between January 2008 (when the first NFMC client was reported into the system) and February 2009.
         8
            The COFI is a common index used to adjust the interest rates of ARMS. It reflects the weighted-average
interest rate paid by 11th Federal Home Loan Bank District (Arizona, California, and Nevada) savings institutions for
savings and checking accounts, advances from the Federal Home Loan Bank, and other sources of funds.


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       4. Mortgage modified with a combination of lower interest rate, longer term
          and/or lower principal: Any combination of the three modifications above.
         If none of the above changes were observed, those loans were flagged as not having
been modified in that month. Because we were only interested in identifying modifications that
would likely lower the probability of a foreclosure, we deliberately set thresholds for loan
modifications that were likely to result in lower monthly payments for homeowners. Indeed,
applying these criteria to the NFMC-counseled loans showed that over 80 percent of the above-
identified modifications resulted in a lower monthly mortgage payment.


Control Variables
        Many factors, apart from counseling, potentially have an impact on whether a home
ends up in foreclosure. The more we are able to measure and include such factors in our
analysis, the better our models would be able to isolate and estimate the impact of counseling in
particular. The existing literature on loan performance and the impacts of counseling helps
identify many of the likely factors. Our own early reconnaissance and initial look at NFMC
quarterly report material further filled in and refined the list (Mayer et al. 2008). The data
available to us, of course, limits the variables we can actually employ.
        In initial modeling attempts, we used a list of some 85 characteristics, including the state
of residence, as control variables in our models. Based on initial model runs, many of these
characteristics proved to have no statistically significant impact on foreclosure outcomes. This
extensive list of controls also challenged the capacity of our computer hardware and software
and, because combinations of them could be closely correlated with each other, made it difficult
to obtain reliable estimates of the model parameters. For these reasons we filtered down our
variable list to those that proved statistically significant in many, if not all, of the model
alternatives. These variables are listed in table 3. (Summary descriptive statistics for these
variables are provided in appendix B.)
        Most of these explanatory variables are standard borrower and mortgage characteristics
that are often included in models of loan performance. A few deserve some explanation,
however. A series of status at intake variables were used to control for the fact that, while the
NFMC and non-NFMC samples were initially matched based on delinquency status as of
January 2008, the performance of these loans turned out to be quite different in later months.
For example, while the share of NFMC and non-NFMC sample loans that were current on their
mortgage payments as of January 2008 were virtually identical (63 percent each), by June only
51 percent of the NFMC loans that had not yet entered counseling were current, compared to
69 percent of the non-NFMC loans. By December, the share of NFMC loans that were current
had dropped to 29 percent, while the non-NFMC loans had held steady at 65 percent.
       This was somewhat unexpected, given that we initially thought that matching on
delinquency status at the beginning of the year would yield two samples of loans with

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reasonably similar performance profiles. To control for these differences, we included variables
in the model that represented whether the loan was one, two, three, or four or more months
delinquent as of the month when the NFMC loan entered counseling. For the non-NFMC loans,
the status variable was based on the month during which that loan’s matched NFMC pair
(selected from the propensity scoring model) entered counseling. 9
        To control for surrounding community effects on foreclosures, we included two measures
of neighborhood quality, both derived from HMDA data for 2006 and 2007: the home mortgage
approval rate and the median value of new home purchase mortgages. Both of these variables
were identified as key measures of neighborhood quality by Galster, Hayes, and Johnson
(2005).
        We also included a control variable for mortgages with a loan-to-value (LTV) ratio at
origination not equal to 80 percent. This variable is included because the LTV may not reflect all
mortgages originated to a property’s owner. In particular, owners may finance a purchase with
both a first lien mortgage and a second lien or piggyback loan. Unfortunately, it is not possible in
the LPS database to match first lien mortgages with corresponding second liens, so secondary
financing cannot be observed directly. As noted in Foote, et al. (2009), however, a large number
of loans in the LPS database have LTV at origination equal to 80 percent, which strongly
suggests that these loans were accompanied by a second mortgage. To control for the impact
of second liens on loan performance outcomes, the “LTV not equal to 80 percent” dummy
variable estimates any decrease in risk for homes purchased without piggyback loans.
         We had initially planned to use the income data from HMDA so that household income
could be used as a control in our NFMC vs. non-NFMC models. We had a large number of
observations with missing income data, however, among our HMDA-matched records. Our
initial analysis suggested that the absence of the income variable did not affect our results, so
we omitted this variable rather than delete large numbers of observations from our analysis
sample.




        9
          For the final modeling analysis, we are considering revising our comparison sample selection procedure so
that we match the non-NFMC and NFMC loans based on the loan status during the month that the NFMC loan
entered counseling, rather than at a fixed point in time.


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 Table 3: Explanatory Variables Used in Models

 Variable Label                  Description
 Status at intake                Number of months delinquent (1, 2, 3, 4 or more). For NFMC
                                 loans, the status is as of the month when client entered
                                 counseling; for non-NFMC loans, the status is as of the month
                                 when the loan’s matched NFMC pair entered counseling.
 Black borrower                  Equals 1 if client is African-American.*
 Hispanic borrower               Equals 1 if client is Hispanic/Latino.*
 Asian/PI borrower               Equals 1 if client is Asian or Pacific Islander.*
 Other race borrower             Equals 1 if client is other race.*
 FICO/Credit Score – Original    Client’s FICO score at origination.
 Current Interest Rate           Current interest rate of client’s loan (%).
 Grade B/C mortgage              Equals 1 if loan is subprime (grade B or C as reported by
                                 mortgage servicer in LPS data).
 ARM loan                        Equals 1 if loan is an ARM.
 Option ARM loan                 Equals 1 if loan is an Option ARM.
 Agency loan                     Equals 1 if loan is a Fannie Mae or Freddie Mac loan.
 Jumbo loan                      Equals 1 if client’s loan was a jumbo loan at origination.
 Portfolio                       Equals 1 is loan is held in portfolio by the originator.
 Government                      Equals 1 is loan is government insured.
 Home mortgage approval rate     Percentage of loan applications that were approved between
 (%), 2006-07                    2006 and 2007 in census tract in which client’s home is
                                 located.
 Mortgage Originations Median    Median purchase loan amount for mortgages originated in a
 Amount Home Purchase - In       client home’s census tract between 2006 and 2007.
 Thousands
 Monthly unemployment rate (%) Unemployment rate reported by the Bureau of Labor Statistics
 for MSA                       for the MSA or state in which the client’s home is located.
 Change in unemployment. rate    Ratio of the current month’s unemployment rate to the January
 since Jan. 08                   2008 rate, multiplied by 100. (A value of less than 100 means
                                 that unemployment declined during the period.)
 Quarterly housing price index   The Federal Housing Finance Agency (FHFA) quarterly house
                                 price index for the MSA or state in which the client’s home is
                                 located.
 Change in HPI since Q1-08       Ratio of the current quarter’s FHFA house price index to the
                                 first quarter 2008 index value, multiplied by 100. (A value of
                                 less than 100 means that housing prices declined during the
                                 period.)
 Year Originated                 Dummy variables for loans originated in 2003, 2003, 2004,
                                 2005, 2006 or 2007. (2002 is the reference category.)


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 Variable Label                       Description
 Loan-to-value ratio                  The loan-to-value ratio at origination, as a percentage.
 Dummy for LTV not = 80               Equals 1 if loan-to-value ratio at origination is not 80 percent.
 Original loan amount                 Amount of the original mortgage loan ($). (This variable is used
                                      in the loan modification model to control for the size of the loan
                                      relative to the reduction amount.)

 Note: *Whites were the omitted race category in the models, that is, the values of the parameter estimates
 for blacks, Hispanics, etc. are relative to white clients.




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MODELS OF PROGRAM EFFECTS


        This section describes the multivariate models that we used to estimate the effects of the
NFMC program on counseled homeowners, using the data sources presented in the previous
section. We begin with a discussion of key issues that might affect the accuracy of our model
estimates, including the problem of selection bias into the NFMC program, the inability to control
for potential differences in behaviors of servicers, and other issues. We discuss how we
attempted to address any potential modeling issues and conclude by presenting a description of
the models that we estimated for each of the three outcomes.


Potential Modeling Issues


         Program Selection and Omitted Variable Bias
         A key challenge presented in evaluating the effects of the NFMC program is a common
problem in most multivariate analyses, that of selection bias. Put simply, people who are more
likely to seek counseling from NFMC Grantees are also are more likely to be in some sort of
financial distress, compared with the overall population of homeowners and, therefore, are more
likely to end up in foreclosure. The analysis sample of 60,870 loans originated to NFMC clients
who received counseling in 2008 indicated that 32 percent were in foreclosure at some point
between January and December 2008 (table 4).10 This was much higher than the U.S. average
of 2.5 percent of all mortgages in foreclosure as of December 2008 (LPS 2009).
         Furthermore, many NFMC clients sought counseling after their loans had already
entered foreclosure. Twenty-two percent of clients served by NFMC Grantees through
December 2008 were in foreclosure before they entered counseling and 5 percent of NFMC
clients’ loans were in foreclosure even before NFMC program Grantees started providing
services in January.




         10
            Note that the share of NFMC clients who experienced a foreclosure is higher than the share of NFMC
clients whose last observed loan status is in foreclosure. The reason is that NFMC clients can enter into foreclosure,
but then, through curing the loan by themselves or through a loan modification, can leave foreclosure. These
foreclosure cures were analyzed as an outcome later in the report.


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       Table 4: NFMC Loans In Foreclosure Between January and December 2008
                                                                                                           % of
                                                                        Loans      % of Loans        Foreclosed
                                                                                                         Loans
       Total sample loans originated to NFMC clients                    60,870            100.0                n/a
       served through Dec. 2008
       Total loans in foreclosure at some point between                 19,680             32.3             100.0
       Jan. and Dec. 2008
           Foreclosure start prior to Jan. 2008                          2,988               4.9             15.2
           Foreclosure start prior to counseling                        10,144             16.7              52.5
           Foreclosure start after counseling                            6,548             10.8              33.3
       No foreclosure between Jan. and Dec. 2008                        41,190             67.7               n/a

       Source: Authors’ calculations from NFMC program data for Jan. to Dec. 2008 and LPS loan performance
       data through Dec. 2008.

       Note: Twenty-five percent of foreclosures that occur subsequent to entry into counseling occur one month
       after intake. These foreclosures, due to possible lags in LPS recording foreclosure dates, may actually have
       occurred prior to intake.

        In theory, we can control for factors that would explain whether a person is more likely to
go into foreclosure and, therefore, would be more likely to enter counseling. In practice,
however, we do not have the data that may be necessary to control for all of these external
factors. For example, while LPS data contain several characteristics that help to predict loan
performance over time (such as a borrower’s credit score), they do not provide information that
can be used to predict the likelihood of a borrower experiencing a trigger event (such as a job
loss or unexpected medical expenses). According to information provided by Grantees, 49
percent of NFMC clients indicated that a reduction or loss of income was the primary reason for
their default. Personal reasons, such as medical issues, a divorce or separation, a death of a
family member or poor budgeting skills were cited by another 20 percent of NFMC clients as the
primary reason for their loan default.
        Such trigger events can create financial distress and lead to mortgage delinquencies
that would push people to seek NFMC counseling. If we do not have any information that can be
used to predict the likelihood of adverse trigger events occurring, then we cannot control for a
potentially important difference between the NFMC sample and the non-NFMC comparison
sample. Consider the following example. Assume that 20 percent of a town’s residents work for
a particular firm and that firm goes out of business such that every person working for that
company loses his/her job and perhaps seeks counseling. In this hypothetical case, the
observable characteristics from the loan performance database would be identical for the
homeowners who lost their jobs and the other residents in the town. Given that many counseling


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clients are in financial distress, the foreclosure rate for these owners will be higher than the
other residents. But, the data we have do not indicate whether or not a homeowner works for
the company that closed, so an analysis of foreclosure rates between counseled residents and
non-counseled residents will show higher rates of foreclosure among the counseled group of
residents.
        In summary, then, we cannot control for all of the relevant differences between the
NFMC and non-NFMC samples because some information is unavailable to us. These
unobservable differences (such as a job loss) might lead us to draw incorrect conclusions about
the effect of the NFMC program on foreclosure outcomes. Because we are, by necessity,
omitting information from our models, this problem is also referred to as omitted variable bias.
        Econometricians have long recognized the problems of selection and omitted variable
bias and have developed techniques to produce unbiased estimates when such problems are
present. For example, a common method is to use instrumental variables which predict whether
a person seeks treatment but do not influence the outcome of interest. Unfortunately, this
approach does not work for us here as we do not have a set of indicators that would allow us to
predict whether someone seeks counseling, but which would have no effect on a loan's time to
foreclosure. Furthermore, the econometric literature offers limited support for an instrumental
variables approach in the context of duration models which we use to estimate the effect of the
NFMC program on foreclosure avoidance.
        Since standard correction methods are unavailable to us, we chose an alternative
approach to address the problem: we estimated a parallel set of models using only the NFMC-
counseled loans. In these models, we compared the performance of the NFMC loans before
counseling to their performance after counseling has started. In this way, the selection bias
problem was largely avoided since we were not comparing the performance of the NFMC loans
to the non-NFMC loans.11
        In regards to the NFMC and non-NFMC comparison models, we make one final
observation which is that, given the relatively poorer performance of counseled vs. non-
counseled loans, the direction of any selection bias would most likely disfavor finding positive
effects of the NFMC program. The difference is illustrated in figure 1, which shows the
deterioration in performance of the NFMC loans over the observation period. As can be seen,
although both the NFMC and non-NFMC samples started off with equal levels of delinquency in
January 2008, the share of NFMC loans that had not yet been counseled and were current
continued to decline steadily, falling to 29 percent by December. The non-NFMC sample,

         11
            The NFMC-only modeling approach does not completely eliminate the problem of selection bias, as there
may still be unobservable differences among NFMC clients that cause some to start counseling sooner than others.
These differences might also lead to different foreclosure outcomes that would not properly be attributed to the effect
of counseling itself. Nonetheless, we believe that the selection bias problem has largely to do with the decision to
enter counseling or not, rather than the timing of the start of counseling.


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however, maintained a relatively constant share of loans that were current, between 60 and 70
percent, throughout the year.
        Therefore, any unobservable differences between the two groups that, independent of
the effect of counseling, lead to worse foreclosure outcomes for the NFMC homeowners, might
be incorrectly interpreted as a negative program effect in the models. As a result, any positive
program effect has the added burden of needing to overcome this selection bias for it to be
discernable in our model estimates. For this reason, any impact of selection bias in this case
would tend to result in underestimates of actual positive effects of the NFMC program on
counseled homeowners.


       Figure 1: Percentage of Loans Not in Counseling that are Current,
       NFMC and Non-NFMC Samples, January to December 2008

                                                           NFMC*         Non-NFMC
          Pct. active loans that are current
          80
                           69         69        69        69        69        68        68        67        67        65        65
               63 63 62
                                 59
          60                               56        54
                                                               51        49
                                                                                   44
                                                                                             41
          40                                                                                           37
                                                                                                                 32
                                                                                                                           29


          20



           0
                Jan      Feb      Mar      Apr       May       Jun        Jul      Aug       Sep       Oct       Nov       Dec

           Source: Authors’ calculations from NFMC program data and LPS loan performance data.
           Note: *The NFMC loans in each month exclude those that began counseling in a prior month.



       Loan Servicer Omission Bias
        The data received from LPS for the NFMC evaluation, which are the basis for our
measures of foreclosure outcomes, do not include any identification of the mortgage servicer.
Furthermore, the licensing agreement with LPS covering the use of these data specifically
prohibits any analysis that would differentiate among individual mortgage lenders or servicers.
The limitation on analysis involving individual servicers leads to two potential problems with our
model estimates of program effects.


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         First, as noted earlier, the LPS loan database includes data from many, but not all,
mortgage servicers in the country. In addition, some servicers do not report actual loan
identification numbers to LPS, so these servicers’ loans cannot be matched to NFMC loans.
Since we can only construct outcomes for loans that were matched to the LPS database, the
performance of NFMC client loans that are served by certain servicers will not be represented in
our results. This means that to the extent that the effect of the NFMC program on foreclosure
outcomes may vary by servicer, our findings will not be generalizable to the entire population of
NFMC-counseled homeowners.
       Second, our method of adding the LPS-derived outcomes to the NFMC loans may be
biasing our results by having different servicers represented in the NFMC and non-NFMC loan
samples. As described earlier, we matched the LPS and NFMC data by the servicer name and
loan number and, since some servicers do not provide actual loan numbers to LPS, loans from
these servicers cannot be matched to the NFMC data. These servicers would still be
represented in the entire population of loans in the LPS database, however, and may have been
included in the comparison sample of non-NFMC loans. As a result, the non-NFMC comparison
loans may include servicers who were not included in the NFMC sample.
        The extent to which the lack of information on specific servicers may have biased our
modeling results depends upon whether servicers exhibit different behaviors toward delinquent
borrowers, conditional upon the characteristics of the loan, the borrower, and the housing
market. For example, a borrower whose loan is held by lenient servicer “A” might have a greater
likelihood of obtaining a favorable loan modification, and thus avoiding foreclosure, than a
nearby identical borrower with an identical mortgage held by less flexible servicer “B.” Since we
cannot control for differences in the distribution of servicers between our NFMC and non-NFMC
samples, these servicer effects could bias our results. If, say, servicer “A” was systematically
excluded from the NFMC sample because they did not provide loan numbers to LPS, but was
present in the non-NFMC comparison sample, then our estimate of NFMC program effects
might be biased toward worse outcomes. If, on the other hand, servicer “B” was excluded from
the NFMC sample, the results would be biased toward better program outcomes.
        While there is evidence that different servicers exhibit disparate behaviors when dealing
with delinquent borrowers, current research cannot quantify the extent of these differences in a
reliable way. One of the most careful analyses of the issue was conducted by Stegman et al.
(2007), who found significant differences among servicers in 30-day delinquency cures,
controlling for borrower and loan characteristics. The analysis demonstrated that four of the
eight mortgage servicers represented in the data had a significantly lower probability of
delinquency cure. Nonetheless, the overall predicted rate of cure for all servicers ranged from a
low of 83 percent to a high of 90 percent, which is not an excessively wide range. Furthermore,
this analysis was only conducted on a sample of about 28,000 Community Reinvestment Act
loans made to low- and moderate-income borrowers and that were purchased by Self-Help, a
leading community development financial institution, as part of a secondary mortgage market

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demonstration project. The preponderance of these loans (40 percent) were to borrowers in
North Carolina; another 21 percent were in rural areas. It is not clear, therefore, the extent to
which these findings can be generalized to the larger mortgage market.
        Similar analysis by Quercia, Ding, and Ratcliffe (2009) found differences in default rates
among servicers for a national sample of private-label securitizations that underwent voluntary
loan modifications. The loans were drawn from a sample of loans that were securitized in 2006
and that were largely originated between 2005 and 2006. The analysis used logistic regression
to control for borrower, loan, and market characteristics. As noted in the study, however, “this
sample of voluntary loan modifications may not be representative of loan modifications by
portfolio lenders.”
        Other analyses of differences in performance of loans by servicer (Dubitsky et al. 2008;
Goodman et al. 2009) have largely been descriptive, and consequently did not control for
differences in the loan portfolios across servicers. This makes it impossible to attribute the
differences in mortgage outcomes solely, or even largely, to variations in servicer behavior, as
opposed to dissimilarities in the characteristics of loans held by different servicers.
        Because we lack any information about servicers in the LPS data, and because we are
contractually prohibited from doing any analysis based on NFMC Grantee-reported servicers
linked to LPS data, it is not possible for us to determine whether any servicer bias exists or, if it
does exist, to estimate the magnitude of the bias or the direction in which our results may be
biased. We further do not know, since LPS considers the information to be proprietary, which
servicers do not report real loan identification numbers or what share of loans in the LPS
database lack such numbers.
        One potential option for addressing this problem would be to change our method for
matching the NFMC and LPS data so that, rather than relying on the loan identification number,
we are using other loan characteristics common to the two data sources. Unfortunately, this
proved not to be possible. Earlier in the study, we attempted to match records between the two
databases using a variety of common loan characteristics, including the amount of the monthly
payment, the property ZIP code, and the current interest rate. These attempts were
unsuccessful because we did not have enough information to make unambiguous matches. For
many NFMC loans, there were multiple loans in the LPS database that met the matching criteria
and it was not possible to determine which loan was the true match.
        To address the issue of potential bias from servicer omission in the matched NFMC
sample, we used the same approach described for addressing the possible selection bias
problem. We ran a set of models estimated only with NFMC loans. The issue of servicer bias is
more likely to be a problem when comparing the performance of NFMC and non-NFMC loans
because of the possibility of very different distributions of servicers being represented in the two
respective samples. By only looking at the NFMC loans, therefore, we can lessen any effects of
servicer bias since we are analyzing data only from one set of servicers. Examining just the


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NFMC loans does not, of course, solve the problem that our analysis may omit some important
servicers altogether. Nevertheless, in the NFMC-only models we would at least be comparing
“apples to apples.” If the NFMC-only models yield results consistent with the comparison
models, then we can reasonably conclude that our findings based on differences between the
NFMC and non-NFMC loans have not been significantly biased.
        In fact, as will be presented in the discussion of our findings, we found consistent,
positive results for the NFMC vs. non-NFMC models and the NFMC-only models for our two
strongest findings – the effect of the NFMC program on foreclosure cures and on reductions in
monthly mortgage payments. (For foreclosure avoidance, we found no significant results when
comparing the NFMC and non-NFMC samples, but we did find modest positive results when
looking only at NFMC loans.) Based on these results, it seems unlikely that the servicers
included in our NFMC sample somehow reflect an unrepresentative sample of organizations
that have either too liberal or too restrictive policies toward troubled homeowners, relative to the
non-NFMC loans.


       Other Issues
        A few other issues might also affect the accuracy and representativeness of the
preliminary analysis of the NFMC program impacts presented in this report. One is that of
program startup effects; that is, clients at the beginning of the NFMC program may have had a
very different experience, and consequently different outcomes, than those who entered the
program later. This is certainly a reasonable assertion, given that program Grantees needed to
increase service capacity to accommodate the additional counseling volume under the NFMC
program. Nonetheless, we did not believe that this issue needed to be addressed in this
preliminary analysis, which only attempts to quantify the average effects of the program.
Furthermore, we lack a sufficiently long observation period at this time to measure the effect on
different cohorts of NFMC clients. For our final analysis of the program, we will explore analysis
of separate cohorts of NFMC clients to see if any useful findings emerge.
         Second, our requirement that all data used in the analysis be matched to HMDA records,
so that we could include race and income in our models, resulted in a large number of potential
NFMC and non-NFMC loans being eliminated from the sample. If the HMDA matching success
could be deemed to be independent of factors that would affect our foreclosure outcomes, then
this would not present a problem. It is possible, however, that certain types of loans or
borrowers are more likely to match successfully to the LPS database than others, and that
exclusion of the non-matching loans might bias our results. While we can see no reason why
HMDA matching success should be correlated with our foreclosure outcomes, we were not able
to assess whether this issue posed a problem in the analysis presented here. We plan to
conduct some additional robustness tests to evaluate whether there is a potential bias problem
and, if so, we may drop the HMDA matching requirement for our final analysis.



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Modeling Approach
         Our research approach was to analyze the NFMC program’s effects on (1) reducing
foreclosures for clients who did not enter counseling already in foreclosure; (2) the ability of
clients to cure a foreclosure; and (3) the reduction in a client’s monthly payment resulting from a
loan modification. When analyzing these effects, we used different multivariate models, as was
appropriate for each outcome being measured, to control for other factors that might also
explain these outcomes, and thereby isolate the impact of the NFMC program.
        We estimated two sets of models: one set comparing outcomes of NFMC-counseled
loans to the comparison sample of non-NFMC loans, and another set estimating the effects
using only the NFMC loans. Comparing the NFMC to non-NFMC loans was essential to
addressing the central question of this analysis: “What would have been the foreclosure
outcomes for NFMC clients had the services offered by NFMC Grantees not been available to
them?” The benefit of further analyzing only the NFMC loans, however, was twofold. First, it
allowed us to estimate the number of foreclosures prevented by the program based on different
levels of treatment; namely, the level of counseling and the number of counseling hours
provided to each client. Second, the NFMC-only analysis largely eliminates any selection bias
issues related to selection into the program and unobservable differences between the NFMC
and non-NFMC loan samples. Both sets of models, therefore, were essential to obtain a fuller
understanding of the effects of the NFMC program.


       Foreclosure Avoidance
         For modeling the program’s effect on reducing foreclosures for clients, we tested
whether, controlling for loan and borrower characteristics, NFMC client loans would enter into
foreclosure more quickly than the non-NFMC comparison group. Delaying foreclosure would
likely increase the ability of the borrower to avoid foreclosure by allowing additional time for
more favorable outcomes, including becoming current on the loan, selling the property,
modifying the loan, or obtaining alternative financing. Therefore, a positive program effect is
evident if the rate at which NFMC loans that enter into foreclosure is about the same or less
than for the comparison group, or is lessened with a greater intensity of counseling services.
        Because we were able to measure the time to foreclosure to the exact date, we
estimated the impact of the NFMC program’s effectiveness in delaying foreclosures with
different forms of survival models.12 Survival models are a class of multivariate models with
three main characteristics that are relevant to our analysis:
       1.         The dependent variable is the waiting time until the occurrence of a well-defined
                  event (in this case, the start of a foreclosure);


       12
            For more on survival models, see Allison 1982.


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       2.      Some of the events may not occur during the time period for which data are
               collected, and so observation of those events is considered to be “censored”; and
       3.      There are predictors, or explanatory variables, that have an effect on waiting
               times that are used as control variables in the models.
        Regarding the second characteristic, in all survival models censoring refers to the fact
that the event of interest (such as a foreclosure) may not occur during the period of observation.
In other words, for this analysis, we were only able to observe the foreclosure status of
counseled and non-counseled loans between January and December 2008. While we may not
observe a foreclosure for a given loan during that period, it is entirely possible that this loan may
enter foreclosure at some future date. Information about these future foreclosures would be
considered “censored,” since we have no knowledge of them. Other standard model estimation
techniques, such as an ordinary least squares (OLS) regression, would not properly account for
censoring of future foreclosures. The structure of these models assumes that all information
about foreclosures is known and that, if no foreclosure was observed, then none took place. As
a result, an OLS model would produce inaccurate estimates of the waiting time to foreclosure.
       In contrast, the underlying distribution of a survival model takes into account any
censored observations and properly accounts for this when estimating the model function.
Given that we were able to measure the waiting times to foreclosure with a very small unit of
time (days), we can treat the waiting times as a continuous distribution. For a continuously
measured dependent variable, the Cox proportional hazards model, a particular type of survival
model, is appropriate for estimating the time to foreclosure.


       Foreclosure Cure
        We estimated models of foreclosure “cure” for NFMC client and non-NFMC comparison
group loans. Our hypothesis is that unobservable characteristics (such as a job loss) make it
more likely for NFMC clients to experience financial distress than non-NFMC homeowners.
Because we cannot control for these unobservable events, however, it is more challenging to
find positive program effects for an outcome like foreclosure avoidance because an
unobservable (to us) future job loss may push a counseled homeowner into foreclosure, despite
the best efforts of the housing counselor.
        For foreclosure cure, however, we are looking only at loans that are already in
foreclosure and we can therefore assume that the same factors that led to a foreclosure for a
non-NFMC loan, whatever they may be, also created financial distress for the NFMC client.
Consequently, the importance of unobservable events, like a job loss, is diminished as these
events are likely to have already taken place for both the NFMC and non-NFMC homeowners.
Furthermore, in the foreclosure cure models we control for the length of the current foreclosure
spell and, therefore, are accounting for differences in outcomes between homeowners who may
be experiencing longer periods of distress.

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       Foreclosure cures can only be observed monthly in the LPS data, so the outcome must
be considered to be measured in discrete time. In other words, we have a relatively small
number of observations (at most twelve) for each loan. In this situation, the appropriate
modeling choice is a logistic regression model (LOGIT) that is used to measure the monthly
probability of foreclosure cures (Allison 1982). This is the model that we have used to estimate
the NFMC program’s effect on foreclosure cures.


       Monthly Payment Reductions
        We compared the reductions in monthly payments between loan modifications to
mortgages held by NFMC clients to those held by non-NFMC clients. Only loans that
experienced a modification between January and December 2008 were used in this analysis.
While we did not know if the demand for loan modifications was the same across the two groups
of loans, we assumed that non-NFMC owners who sought a loan modification were in the same
level of financial distress as NFMC owners who sought a loan modification and that, therefore,
differences in the payment reductions between these two groups of loans were a result of the
NFMC program.
        For this outcome, the dependent variables were the amount of reduction in the monthly
mortgage payment (payment increases were coded as a negative reduction), expressed as a
dollar amount and as a percentage of the original monthly payment. Because we were dealing
with a continuous variable as an outcome, we used a standard ordinary least squares
regression to model these outcomes.




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FINDINGS


        As detailed below, our modeling results indicate that the NFMC program had favorable
effects in helping homeowners who faced foreclosure. Homeowners who received services from
NFMC Grantees in 2008 had a reduced risk of going into foreclosure, and counseled
homeowners in foreclosure were more likely to come out successfully than homeowners in
foreclosure who did not receive services from NFMC Grantees. In addition, NFMC clients
received loan modifications that resulted in significantly larger reductions in monthly payments
than loan modifications received by non-NFMC homeowners.


NFMC Program’s Effect on Foreclosure Avoidance
        Our analysis of foreclosure avoidance focused on homeowners who started counseling
not already in foreclosure. Foreclosures after the start of counseling represented a relatively
small portion of the total foreclosures experienced by NFMC clients in 2008. Of the 60,870
NFMC clients in our sample, 19,680, or 32 percent, were in the foreclosure process at some
point in 2008. About two-thirds of these foreclosure episodes (67 percent) experienced by
counseled homeowners started prior to any counseling services being rendered by an NFMC
Grantee. Since counseling cannot help homeowners avoid a foreclosure that has already
begun, these pre-counseling foreclosures were not included in our foreclosure avoidance
analysis.
        Of the 47,738 NFMC sample clients who were not in foreclosure when they entered
counseling, 6,548 (14 percent) had a foreclosure start after beginning counseling (table 5). The
share of NFMC clients whose foreclosure started after they began counseling was greater for
owners whose loans were delinquent as of January 2008, when Grantees started offering
NFMC-supported foreclosure prevention services. About a quarter (23 percent) of NFMC clients
whose mortgage was delinquent as of January 2008 experienced a foreclosure after they
started counseling. The share of NFMC clients whose loan went into foreclosure after receiving
counseling services was greater for clients whose loan was delinquent for longer periods: 20
percent for those 1 month delinquent as of January 2008, 23 percent for 2 months delinquent,
26 percent for 3 months delinquent, 30 percent for 4 or more months delinquents. Conversely,
only 10 percent of NFMC clients who were current on their mortgage as of the beginning of
2008 experienced a foreclosure after they started counseling.




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Table 5: Descriptive Analysis of NFMC Loans Not In Foreclosure Prior to Counseling

                                                           Loan status as of January 2008
                                                                      Delinquent (Months)


                                       All                                                             Total
                                    Loans Current            1           2          3      4+    Delinquent
Total NFMC loans not in             47,738    35,151    6,305       2,668      1,216    2,398         12,587
foreclosure prior to counseling
Loans with foreclosure start         6,548     3,648    1,248         623        319      710              2,900
after counseling
Percent of loans                      14%       10%       20%        23%        26%      30%               23%

Source: Authors’ calculations from NFMC program data for Jan. to Dec. 2008 and LPS loan performance data
through Dec. 2008.

        Our analysis of foreclosure avoidance comparing NFMC and non-NFMC loans did not
yield any significant estimates of positive program effects. It is highly likely that we lacked the
necessary information, such as data on loss of income or unanticipated household expenses,
that would allow us to control for all of the factors necessary to differentiate foreclosure
outcomes between the NFMC and non-NFMC loans. Therefore, we focused our analysis on the
NFMC-only models for this outcome.
         For the NFMC-only modeling analysis, we used a single hazard model that compared
the foreclosure experience of NFMC clients before they entered counseling with their
experience after counseling began. The estimated program effect was represented by the
change in a client’s likelihood of entering foreclosure while receiving counseling services relative
to their likelihood prior to counseling. Given the very different observed behavior of loans based
on delinquency status, we estimated four separate models for clients who were current, one
month, two months, three months, and four or more months delinquent on their mortgages, as
of January 2008.
        The summary of key results from these models is presented in table 6. The table shows
only the impact of counseling for borrowers in the four different levels of mortgage delinquency.
It does not report the impact of other control variables on foreclosure outcomes. The full set of
modeling results may be found in appendix C.




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       Table 6: Hazard Model Estimates of Counseling Effects on
       Likelihood of Foreclosure, NFMC-Counseled Loans Only

       Model:
       Months Delinquent as
       of January 2008
                               Parameter Estimate       Pr > ChiSq        Hazard Ratio
       0 (Current)             0.39822                  <.0001            1.489
       1                       0.09244                  0.1968            1.097
       2                       -0.18266                 0.0604            0.833
       3                       -0.21597                 0.0864            0.806
       4+                      0.09511                  0.2547            1.100

       Source: Hazard model estimates from NFMC program data for Jan. to Dec. 2008 and LPS loan
       performance data through Dec. 2008.

         The key statistics in table 6 are in the last column, labeled “Hazard Ratio.” This ratio
represents the proportionate impact of counseling on the likelihood of foreclosure. A hazard
ratio of 1 means that a homeowner, after entering counseling, has the same likelihood of a
foreclosure start as before he/she entered counseling. In other words, this would indicate no
program effect. A hazard ratio significantly greater than 1 would mean that the homeowner was
more likely to start a foreclosure after counseling began; while a hazard ratio of less than 1
would mean that the homeowner was less likely to have a foreclosure start after entering
counseling.
        The column labeled “Parameter Estimate” contains the model coefficients which
translate into the hazard ratios. The column labeled “Pr > ChiSq” reports statistical significance
of the hazard ratios being different from 1.0 (i.e., no effect). Significance levels of 0.10 or
smaller correspond to statistical confidence at the 90-percent level, which means that entry into
counseling is statistically likely to have an impact on the outcome.
        The model results indicate that NFMC-counseled homeowners who were two or three
months delinquent on their mortgages as of January 2008 were significantly less likely to enter
foreclosure after the start of counseling. Homeowners who were two months delinquent would
be only 83 percent as likely to suffer a foreclosure once counseling had begun, as opposed to
before counseling. The percentage of foreclosures prevented by counseling is, therefore, 17
percent (100 minus 83) of those who entered counseling and who were not yet in foreclosure.
Similarly, NFMC-counseled homeowners who were three months delinquent on their mortgages
as of January 2008 were 81 percent as likely to start foreclosure as they were prior to
counseling.




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         The only other result that was statistically significant was for homeowners who were
current on their loans as of January 2008. These homeowners were 1.5 times more likely to
start a foreclosure after entering counseling than they were prior to counseling. We consider this
to be a spurious finding, however, as it does not seem reasonable to attribute such a
detrimental effect to the counseling program itself. One possible explanation might be that
certain people who were still current on their mortgages at the start of the year, but who later
suffered a serious unanticipated problem (such as a job loss), might proactively enter
counseling shortly before foreclosure is imminent. Since it would be highly unlikely at that point
for the homeowner to avoid a foreclosure start, counseling might appear to be correlated with
higher foreclosure rates for these homeowners, even though counseling was not the cause of
the problem.
         The impact of counseling is not statistically significant for those borrowers either one
month delinquent or four or more months delinquent at the start of the year. That we could not
find a significant counseling impact for clients with severe delinquencies is consistent with our
early field work information and review of the literature, in which counseling agencies report the
greatest likelihood of success for people who come into counseling fairly soon after their
problems arise. The impact of counseling in those cases may be more to cure foreclosures after
they occur than to avoid a foreclosure start. (We analyze counseling’s impact on such cures in
the next section.)
        Using the hazard ratios, we estimated the number of foreclosures avoided by the NFMC
program through December 31, 2008. The estimate was based only on the statistically
significant hazard ratios for NFMC clients who were 2 months or 3 months delinquent on their
mortgage as of January 2008. Overall, about 260,000 clients were served in calendar year
2008, of which 7 percent (18,200 clients) were 2 month delinquent as of January 2008 and 4
percent (10,400) were 3 months delinquent. Based on our sample of loans with performance
information, we estimate that 2,708 loans that were 2 months delinquent went into foreclosure
during 2008 and 1,387 loans that were 3 months delinquent went into foreclosure during the
same period. Without the NFMC program, we estimate that a total of 880 additional loans (555
that were 2 months delinquent in January 2008 and 325 that were 3 months delinquent as of
January 2008) would have gone into foreclosure during 2008.
        A recent report estimates that foreclosures create costs that average about $37,300 per
foreclosed loan.13 Therefore, we roughly estimate that the NFMC program, by preventing 880
foreclosures, created potential savings of about $33 million between January and December
2008 (assuming that all of these foreclosures would have been completed at some time in the
future). This estimate does not include the impact of NFMC counseling on the ability of clients to


13
  McFarlane, Alistair, Edward Szymanoski Kurt Usowski. 2009. The Impact of the HOPE for Homeowners Program
Rule. Washington, DC: US Department of Housing and Urban Development.


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cure their foreclosures (discussed next), which creates similar savings as foreclosures avoided.
Moreover, the above estimate does not include differences in payments from loan modifications
that NFMC clients received compared to modifications they would have received without the
help of NFMC counseling, which we also examined.
         We also used the same NFMC-only foreclosure avoidance model to analyze the
differential impact of levels of counseling provided to homeowners (Levels 1, 2, and 3) and the
number of hours of individual counseling. We found no consistent positive or negative effect,
however, of the differing levels compared to each other. On a preliminary basis, we think that
there is a major obstacle in observing impacts using these measures of counseling quantity. It is
likely that more counseling signals a combination of borrowers having more severe problems
and/or difficult servicers with whom to work, together with counselors providing more extensive
help. There is no reason to expect necessarily better or worse outcomes for cases with higher
levels of counseling, and the findings therefore do not provide additional information about the
impact of level of counseling service on foreclosures avoided.


NFMC Program’s Effect on Foreclosure Cures
        Receiving a foreclosure notice does not mean that a homeowner will lose his/her home.
Homeowners may be able to cure a foreclosure by paying all or part of the outstanding amount
owed, by negotiating a forbearance agreement or new loan terms with the lender, or by some
combination of both payment and negotiation. Some homeowners may be able to cure their
foreclosure through their own efforts, while others may need the services of a housing counselor
to avoid a foreclosure sale.
        For this outcome, we estimated whether homeowners in foreclosure were more likely to
cure their foreclosure, and thereby reduce the likelihood of losing their home if they made use of
counseling services provided by NFMC Grantees. Based on our analysis of the NFMC and LPS
data, 32 percent of counseled homeowners in our loan sample were in foreclosure sometime in
2008, compared to 17 percent of the non-NFMC group.14 We observed each of these loans to
determine whether a foreclosure cure occurred after the start of the current foreclosure episode,
but before January 2009. In some cases, homeowners who eventually sought NFMC counseling
cured their foreclosure prior to the start of counseling (about one third of the NFMC
foreclosures). We did not count these pre-counseling cures as an effect of the program; we only
included cures that occurred after the start of counseling as a program effect.
        As with the other outcomes, we estimated the NFMC program’s effect on a client’s
likelihood of curing a foreclosure with two types of models. The first used both NFMC and non-
NFMC loans and the second used only loans for NFMC clients. For the latter, we estimated two

         14
           Some of these foreclosures started prior to January 2008. They were still considered a foreclosure
episode for this analysis if the episode continued into 2008.


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versions of the model, one with a simple counseling effect and another to estimate the effects of
different levels of counseling service provided.
        The estimates from all models showed statistically significant, positive effects of the
NFMC program (table 7; full model results may be found in appendices D and E). Clients who
received services from NFMC Grantees were about 1.6 times more likely to cure their
foreclosure than homeowners who did not receive such services from NFMC Grantees. The
estimated impact was nearly identical when NFMC clients were compared to non-NFMC clients
(the NFMC vs. non-NFMC model) and when we compared the NFMC clients pre- and post-
counseling experiences (NFMC-only models).


       Table 7: LOGIT Model Odds Ratio Estimates for
       Counseling Effects on Likelihood of Foreclosure Cure

                                             Odds Ratio Estimates for
                                                Foreclosure Cure
                                           Point          95 Percent
                                          Estimate     Confidence Interval

       NFMC vs. Non-NFMC Model
       Effect of Counseling                      1.6         1.56       1.72


       NFMC-Only Model #1
       (Simple Counseling Effect)
       Effect of Counseling                      1.6         1.49       1.68


       NFMC-Only Model #2
       (Counseling Level Effects)
       Counseling Level 1                        1.5         1.40       1.62
       Counseling Level 2                        1.5         1.39       1.67
       Counseling Level 3                        1.8         1.64       1.91
       Hours of counseling                       1.0         0.99       1.00

       Source: LOGIT model estimates from NFMC program data for Jan. to Dec. 2008 and
       LPS loan performance data through Dec. 2008.

       As noted earlier, one potential issue with our analysis is that all servicers are not
represented in our NFMC sample, whereas it is likely that non-NFMC loans are serviced by a
representative sample of all servicers that report information to LPS. Nonetheless, the estimated
program effect on the likelihood of foreclosure cures was the same whether we compared
NFMC and non-NFMC loans or we examined only NFMC loans. Based on these results, it
seems unlikely that the servicers included in our NFMC sample somehow reflect an

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unrepresentative sample of organizations that have either too liberal or too restrictive policies
toward foreclosure cures, relative to the non-NFMC loan sample.
         The positive program effect on foreclosure cures was about the same regardless of the
level of treatment received by a client. Compared to receiving no counseling, recipients of Level
1, Level 2 and Level 3 counseling services all had a 1.5 to 1.8 times greater likelihood of curing
a foreclosure. The differences across counseling levels were not statistically significant,
however, meaning that we could not discern any differential effect based on the level of
counseling service provided. Furthermore, after controlling for counseling level, the number of
hours spent counseling the client did not significantly impact, positively or negatively, the
likelihood of a foreclosure cure (i.e., the odds ratio for hours of counseling provided was not
statistically different from 1.0). This may be because the counseling level, by itself, adequately
captures the variation in counseling services being provided. In addition, spending a larger
number of hours with clients may reflect the greater complexity of these cases, which in turn
makes it more difficult to achieve a successful outcome.


NFMC Program’s Effect on Loan Modifications
        Based on information we collected from Grantees during our case study site visits, an
important service provided by NFMC counselors is to call a client’s loan servicer to discuss the
possibility of modifying the mortgage to make it more affordable to the homeowner. Before
contacting the servicer, NFMC counselors use the expense and income information provided by
the client to determine what type of loan modification would result in a new monthly payment
that would be affordable to the homeowner. Non-NFMC homeowners, of course, can contact
loan servicers themselves and request loan modifications. For this analysis, we estimated
whether loan modifications received for counseled clients were more beneficial to those
homeowners than modifications negotiated outside of the NFMC program.
        As described earlier, the LPS data allowed us to identify loan modifications, although not
with absolute precision. Our method for identifying modifications was based on observed
changes in loan terms that were most likely to have reduced the monthly payments for the
homeowner. Using this methodology, we identified modified loans within both the NFMC and
non-NFMC samples. We also calculated the reduction in monthly mortgage payment (for
principle, interest, taxes, and insurance) that resulted from the modification, both as an absolute
dollar amount and a percentage change from the previous payment level.
        Approximately 18 percent of NFMC-counseled loans and 11 percent of non-NFMC loans
in our sample received a loan modification between January and December 2008. About one
quarter of NFMC clients received their loan modification prior to the start of counseling services.
As was the case with the other outcomes we examined, we did not count these pre-counseling
modifications as a program effect.



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        To determine the effect of the NFMC program on a client’s loan modification, we ran
ordinary least squares (OLS) regression models that estimated the payment reduction while
controlling for other factors that might affect the amount that the monthly payment was lowered.
We used the same control variables as in our previous models, but also added the original loan
amount to control for the size of the loan, since larger loans would tend to have larger monthly
payments and therefore might be expected to receive larger payment reductions. As with the
other outcomes, we estimated a model comparing NFMC with non-NFMC loans, as well as
models measuring counseling effects for only the NFMC loans.
        All models yielded consistent, statistically-significant results indicating that NFMC-
counseled homeowners received much more favorable loan modification terms from their
servicers than homeowners who received modifications without the benefit of NFMC counseling
(tables 8 and 9; full model results may be found in appendices F and G). NFMC client loans that
were modified had a resulting monthly payment that was $454 less, on average, than the non-
NFMC-counseled loans that received a modification. This corresponds to an average payment
that was 17 percent less than would have been the case without counseling.
        Results from the models estimated with only NFMC loans found similar positive program
effects. The overall counseling effect from the NFMC-only model (model #1) was virtually
identical to the NFMC vs. non-NFMC model, with an average additional payment reduction of
$456 or 19 percent. Model #2 looked at the effects of different levels of counseling on payment
reductions. The results from NFMC-only model #2 showed that all three levels of counseling
service provided comparable benefits to counseled homeowners, with average additional
payment reductions between $357 and $523, for Levels 2 and 3 counseling, respectively.
       As we noted in the discussion of the foreclosure cure results, the robustness and
consistency of our findings of a positive program effect for this outcome would seem to minimize
the concern that differences in the servicer representation between our NFMC and non-NFMC
loan samples are biasing our modeling analysis.
         The number of individual counseling hours provided to the client had a small, although
statistically significant, impact on the amount of payment reduction received from the loan
modification. Each additional hour of counseling services provided reduced the amount the
payment reduction by $2.50 or 0.09 percent. It is likely that this result reflects the additional time
required to counsel more difficult cases which, for reasons beyond the control of the counselor,
may in turn make it less likely for the homeowner to receive a better loan modification.
        That NFMC-counseled homeowners received more favorable loan modifications than
non-counseled homeowners is a potentially very significant finding regarding the longer-term
impacts of the program. As noted earlier, research on loan performance has highlighted a
positive relationship between better mortgage outcomes (such as foreclosure avoidance and
reduced delinquency recidivism) and significant reductions in monthly loan payments.
Therefore, to the extent that NFMC Grantees were able to help homeowners obtain more


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beneficial loan modifications from servicers and lenders, one would expect to see improved
client outcomes. In future analyses, we will examine directly the extent to which recipients of
loan modifications were able to keep current on their mortgages subsequent to having their
payment reduced.


       Table 8: OLS Regression Model Estimates for Counseling Effects on
       Dollar Reduction in Monthly Payment Resulting from Loan Modifications

                                           Average Additional Reduction ($)
                                                 in Monthly Payment
                                          Parameter           95 Percent
                                           Estimate        Confidence Interval
       NFMC vs. Non-NFMC Model
       Effect of Counseling                        454            424         484


       NFMC-Only Model #1
       (Simple Counseling Effect)
       Effect of Counseling                        456            425         486


       NFMC-Only Model #2
       (Counseling Level Effects)
       Counseling Level 1                          453            418         487
       Counseling Level 2                          357            312         403
       Counseling Level 3                          523            486         560
       Hours of counseling                         -2.5           -4.9         0.0

       Source: OLS model estimates from NFMC program data for Jan. to Dec. 2008 and
       LPS loan performance data through Dec. 2008.




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 Table 9: OLS Regression Model Estimates for Counseling Effects on
 Percentage Reduction in Monthly Payment Resulting from Loan Modifications

                                      Average Additional Reduction (%)
                                            in Monthly Payment
                                     Parameter           95 Percent
                                      Estimate        Confidence Interval
 NFMC vs. Non-NFMC Model
 Effect of Counseling                           17         16.5          17.9


 NFMC-Only Model #1
 (Simple Counseling Effect)
 Effect of Counseling                           19         17.8          19.6


 NFMC-Only Model #2
 (Counseling Level Effects)
 Counseling Level 1                             19         17.9          19.8
 Counseling Level 2                             16         14.8          17.4
 Counseling Level 3                             20         19.3          21.4
 Hours of counseling                         -0.09        -0.16         -0.02

 Source: OLS model estimates from NFMC program data for Jan. to Dec. 2008 and
 LPS loan performance data through Dec. 2008.




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CONCLUSION


        Round 1 of the NFMC program served over 300,000 clients through December 2008. An
overwhelming share of the program’s clients were in financial distress, most likely due to a loss
or reduction in their income. About 75 percent of NFMC clients were delinquent on their
mortgage when they started counseling, including 22 percent of clients who received a
foreclosure notice before they obtained counseling services.
        Although NFMC clients were frequently in a perilous financial situation, our preliminary
analysis showed that counselors employed by the program’s Grantees were able to achieve
better results, for several key client outcomes, than would have been the case had the client not
used NFMC-funded services. Based on analyses of loan performance information, NFMC
program counselors helped 880 clients avoid foreclosure through the end of December 2008.
We estimated that this created a potential cost-savings of $33 million in foreclosure avoidance
between January and December 2008.
        About two-thirds of the foreclosures among NFMC clients started before the homeowner
began counseling. The NFMC program, of course, could not help prevent such foreclosures.
Nonetheless, NFMC counselors made it more likely that such clients (as well as clients who
received foreclosure notices after they started counseling) would be able to cure their
foreclosure. Compared to non-NFMC homeowners who received foreclosure notices, NFMC
clients were about 1.6 times more likely to cure their foreclosure in 2008.
       Finally, NFMC clients received loan modifications that resulted in lower monthly
payments, as compared to non-NFMC clients. We estimated that NFMC clients, without
counseling, would have received a loan modification with a monthly payment $454 higher than
the modification they actually received. Lower monthly payments should increase the likelihood
that NFMC clients remain current on their modified mortgage.
        In conclusion, our preliminary analysis of the NFMC program, using data on clients and
loan performance through December 2008, suggests that the program is having its intended
effect of helping homeowners who are facing loss of their homes through foreclosure. In
subsequent analyses, we will be able to estimate the program’s impact on clients who received
counseling services in 2009. We will also observe loan performance over a longer period of
time, which will allow for a better measurement of the overall impact of the NFMC program.
       Indeed, as we only observed data through 2008 in this preliminary analysis, we may find
more foreclosures avoided as we extend the time period for which we observe loan

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performance and analyze data for more clients. Our analysis to date has suggested that
receiving good loan modifications – ones that are likely to reduce the amount of the
homeowner’s monthly payment to an affordable level – greatly improves client outcomes. These
findings are consistent with other research (OCC and OTS 2009). The period for this analysis
(January through December 2008) was one in which loan modifications were reportedly more
difficult to obtain than currently. For example, the federal government introduced the Making
Home Affordable program in 2009, which is intended to help more homeowners obtain
sustainable loan modifications by offering financial incentives to lenders. If we do, in fact, see
more NFMC clients obtaining loan modifications in the second program year, then we would
hope to observe better outcomes for these homeowners as well.




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REFERENCES


Allison, Paul D. 1982. “Discrete-Time Methods for the Analysis of Time Histories.” Sociological
        Methods, 13, 61-98.
Ambrose, Brent W. and Charles A. Capone. 1998. “Modeling the Conditional Probability of
      Foreclosure in the Context of Single-Family Mortgage Default Resolutions.” Real Estate
      Economics, 26(3), 391-429.
Coulton, Claudia, Tsui Chan, Michael Schramm, and Kristen Mikelbank. 2008. “Pathways to
       Foreclosure: A Longitudinal Study of Mortgage Loans, Cleveland and Cuyahoga County,
       2005-2008." Case Western Reserve University, Center on Urban Poverty and
       Community Development, Cleveland, OH.
Dubitsky, Rod, Larry Yang, Stevan Stevanovic, Thomas Suehr. 2008. Subprime Loan
       Modifications Update. Credit Suisse. October 1.
Elmer, Peter J. and Steven A. Seelig. 1998. “The Rising Long-Term Trend of Single-Family
       Mortgage Foreclosure Rates.” FDIC Working Paper 98-2. Washington, DC: Federal
       Deposit Insurance Corporation.
Foote, Christopher L., Kristopher S. Gerardi, Lorenz Goette, and Paul S. Willen. 2009. Reducing
       Foreclosures. Boston, MA: Federal Reserve Bank of Boston. Public Policy Discussion
       Papers. No. 09-2.
Galster, George, Chris Hayes, and Jennifer Johnson. 2005. “Identifying Robust, Parsimonious
       Neighborhood Indicators.” Journal of Planning Education and Research 24, 265-280.
Gardner, Mona J. and Dixie L. Mills. 1989. “Evaluating the Likelihood of Default on Delinquent
      Loans.” Financial Management, 18(4), 55-63.
Goodman, Laurie, Roger Ashworth, Brian Landy, and Ke Yin. Everything You Always Wanted
     To Know About Modification But Were Afraid To Ask. Amherst Mortgage Insight. June
     23.
Hartarska, Valentina and Claudio Gonzalez-Vega. 2005. "Credit Counseling and Mortgage
       Termination by Low-Income Households." Journal of Real Estate Finance and
       Economics, 30 (3), 227-43.




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     Preliminary Analysis of Program Effects



Hirad, Abdighani and Peter M. Zorn. 2001. “A Little Knowledge is a Good Thing: Empirical
       Evidence of the Effectiveness of Pre-Purchase Homeownership Counseling.” McLean,
       VA: Freddie Mac.
LPS Applied Analytics. 2009. Mortgage Monitor: December 31, 2008 Performance Data
      Prepared as of January 20, 2009.
Mayer, Neil, Peter A. Tatian, Kenneth Temkin, and Mark Benson. 2009. National Foreclosure
       Mitigation Counseling Program Evaluation: Interim Report #2. Washington, D.C.: The
       Urban Institute. Prepared for NeighborWorks® America. May 12.
Mayer, Neil, Peter A. Tatian, Kenneth Temkin, Elizabeth Guernsey, and Leah Hendey. 2008.
       National Foreclosure Mitigation Counseling Program Evaluation: Interim Report #1.
       Washington, D.C.: The Urban Institute. Prepared for NeighborWorks® America.
       December 19.
Office of the Comptroller of the Currency and Office of Thrift Supervision. 2009. OCC and OTS
        Mortgage Metrics Report: Second Quarter 2009. Washington, D.C.: U.S. Department of
        the Treasury. September.
Quercia, Roberto G., Lei Ding, and Janneke Ratcliffe. 2009. Loan Modification and Redefault
       Risk. Chapel Hill, NC: Center for Community Capital, University of North Carolina.
       Working paper. March.
Quercia, Roberto G., George W. McCarthy, and Michael A. Stegman. 1995. “Mortgage Default
       among Rural, Low-Income Borrowers.” Journal of Housing Research, 6(2): 349-369.
Quercia, Roberto G., Michael A. Stegman, and Walter R. Davis. 2005. "The Impact of Predatory
       Loan Terms on Subprime Foreclosures: The Special Case of Prepayment Penalties and
       Balloon Payments." The University of North Carolina at Chapel Hill , Center for
       Community Capitalism, Chapel Hill, NC.
Stegman, Michael A., Roberto G. Quercia, Janneke Ratcliffe, Lei Ding, and Walter R. Davis.
      “Preventive Servicing Is Good for Business and Affordable Homeownership Policy.”
      Housing Policy Debate. 18(2). 243-278.




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         Appendix A: HMDA Matching Methodology




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        HMDA loan application records (LARs) for mortgages originated between 2002 and
2007 were match merged with LPS loan records for mortgages active as of January 2008 and
originated since 2002. The objective was to attain a sufficient number of exact loan matches to
generate a comparison sample of LPS loan records containing information on race, gender,
ethnicity, and Census tract location obtained from the matching HMDA loan records.
       The matching procedure included the following steps:
           1. Prepared LPS loan records from January 2008 for matching within counties by
              assigning LPS 5-digit ZIP codes to 5-digit FIPS state-county codes using
              commercially available ZIP-to-county conversion data.
           2. Prepared extracts of HMDA LARs for originated mortgages for all years from
              2002 to 2007 (HMDA data for 2008 will not be released until September 2009).
              HMDA LARs include information on Census tract, and 5-digit FIPS state-county
              codes.
           3. Develop additional common matching variables for both LPS and HMDA loan
              records, including:
                  FIPS 5-digit State-County Code
                  Origination Year
                  Original Loan Amount
                  Lien Status
                  Loan Type (Conventional, FHA, VA, Other)
                  Loan Purpose (Purchase, Home Improvement, Refinance)
                  Property Type (Single Family, Manufactured, Multi-Family)
                  High Interest Rate Loan
           4. The HMDA and LPS loan records were matched by successively loading each
              year of HMDA data and match merging all LPS loans present in the January
              2008 LPS extract and originated in the same year.
           5. Lien status, property type, and ethnicity were included in HMDA only since 2004,
              so these variables were not used in matching for HMDA years 2002 and 2003.
              The high-interest-rate loan indicator was excluded from the final matching
              algorithm due to limitations on the available data in HMDA (reported as yield
              spread only when exceeding yield on corresponding Treasury maturity by
              specified margins).
           6. The resulting candidate matches were retained only if there was a unique match
              within loan subgroups defined by unique combinations of the variables used for


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         matching. That is, a matched pair of HMDA and LPS loans is considered to be an
         exact match only if it is unique within its county, origination year, loan amount,
         lien status, loan type, loan purpose, and property type combination.
     7. Matching loan records for each HMDA year were then combined into a single
        matched-loan file representing loans active (present in the LPS extract) as of
        January 2008. These loan records included LPS loan IDs and additional
        variables from HMDA for race, gender, ethnicity, and Census tract location.




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             Appendix B: Descriptive Statistics for
                Model Explanatory Variables




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Descriptive Statistics for Model Explanatory Variables

Variable                                        Mean               Minimum            Maximum

CurrentIntRate                                6.77605               1.12500           16.37500

IntTypeARM                                    0.36785                    0             1.00000

OptionARM                                     0.12498                    0             1.00000

InvAgency                                     0.48563                    0             1.00000

Jumbo                                         0.24855                    0             1.00000

ApprovalRateHomePurch_06_07                  61.67627             19.04762           100.00000

MrtgOrigMedAmt_thou                         245.36079              24.75000               3104

unemp_chg_pct                               110.36223              39.66942          301.88679

Hpi_chg_pct                                  92.86785              57.31754          107.73391

LTV                                          77.22714               2.06250          406.84138

LTVnot80                                      0.84685                    0             1.00000

MrtGrdBC                                      0.10970                    0             1.00000

FICOOrg                                     684.31527            300.00000           832.00000

Unemp                                         6.16705               2.20000           27.20000

black                                         0.13191                    0             1.00000

asian                                         0.03900                    0             1.00000

hispanic                                      0.16135                    0             1.00000

othrace                                       0.03250                    0             1.00000




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Appendix C: Parameter Estimates for Hazard Models of
         Time to Foreclosure – NFMC Only




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Hazard Model of Time to Foreclosure - NFMC Only, Simple Program Effect:
Loans Current as of January 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 41267.905      40602.221
AIC         41267.905   40650.221
SBC         41267.905   40786.930



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 665.6842      24   <.0001
Score             636.0120     24   <.0001
Wald              687.6475     24   <.0001




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Analysis of Maximum Likelihood Estimates
                                    Parameter    Standard                             Hazard
Variable                         DF Estimate     Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
Entered_counseling               1   0.39822     0.05038    62.4809      <.0001       1.489   Client entered
                                                                                              counseling
black                            1   -0.34510    0.06427    28.8287      <.0001       0.708   Black borrower
asian                            1   0.08219     0.10936    0.5649       0.4523       1.086   Asian/PI borrower
othrace                          1   0.07542     0.09082    0.6896       0.4063       1.078   Other race borrower
hispanic                         1   -0.01365    0.05708    0.0572       0.8110       0.986   Hispanic borrower
income_thou                      1   -0.00511    0.0007472 46.7739       <.0001       0.995   NFMC-reported income
                                                                                              ($ thousands)
FICOOrg                          1   -0.00203    0.0004040 25.2502       <.0001       0.998   FICO/Credit Score –
                                                                                              Original
CurrentIntRate                   1   0.13634     0.01966    48.1000      <.0001       1.146   Current Interest Rate
MrtGrdBC                         1   -0.53540    0.06619    65.4306      <.0001       0.585   Grade B/C mortgage
IntTypeARM                       1   0.18749     0.05521    11.5306      0.0007       1.206   ARM loan
IntTypeOth                       1   -0.37448    0.18344    4.1672       0.0412       0.688   Other interest type loan
OptionARM                        1   -0.43206    0.07622    32.1338      <.0001       0.649   Option ARM loan
InvAgency                        1   -0.13446    0.06247    4.6334       0.0314       0.874   Agency loan
InvGov                           1   -0.22407    0.45284    0.2448       0.6207       0.799   Government loan
InvPortfolio                     1   -0.31372    0.08226    14.5443      0.0001       0.731   Portfolio loan
Jumbo                            1   0.20634     0.07895    6.8316       0.0090       1.229   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00745    0.00230    10.4536      0.0012       0.993   Home mortgage
                                                                                              approval rate (%), 2006-
                                                                                              07
MrtgOrigMedAmt_thou              1   -0.0005879 0.0003057 3.6981         0.0545       0.999   Median amount home
                                                                                              purchase mortgages ($
                                                                                              thousands)
Unemp                            1   -0.14909    0.01674    79.2916      <.0001       0.861   Monthly unemployment
                                                                                              rate (%)
Unemp_chg_pct                    1   -0.01840    0.00142    167.1203     <.0001       0.982   Pct change in unemp.
                                                                                              rate since 1/08
Hpi                              1   0.0002246   0.0004546 0.2441        0.6213       1.000   Quarterly housing price
                                                                                              index
Hpi_chg_pct                      1   -0.04471    0.00394    128.7224     <.0001       0.956   Pct change in HPI since
                                                                                              1/08
LTV                              1   0.01354     0.00169    64.4306      <.0001       1.014   Loan-to-value ratio
LTVnot80                         1   0.13124     0.05561    5.5700       0.0183       1.140   Dummy for LTV not = 80




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Hazard Model of Time to Foreclosure - NFMC Only, Counseling Level Effects:
Loans Current as of January 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 41267.905      40590.822
AIC         41267.905   40644.822
SBC         41267.905   40798.619



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 677.0837      27   <.0001
Score             652.4132     27   <.0001
Wald              702.9539     27   <.0001




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Analysis of Maximum Likelihood Estimates
                                    Parameter    Standard                             Hazard
Variable                         DF Estimate     Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
level_1_intk                     1   0.38153     0.05725    44.4076      <.0001       1.465   Received level 1
                                                                                              counseling
level_2_intk                     1   0.50340     0.08167    37.9961      <.0001       1.654   Received level 2
                                                                                              counseling
level_3_intk                     1   0.26636     0.07257    13.4727      0.0002       1.305   Received level 3
                                                                                              counseling
counseling_hours                 1   0.01154     0.00437    6.9858       0.0082       1.012   Tot indiv counseling
                                                                                              hours received
black                            1   -0.33289    0.06471    26.4652      <.0001       0.717   Black borrower
asian                            1   0.09118     0.10941    0.6945       0.4046       1.095   Asian/PI borrower
othrace                          1   0.08419     0.09086    0.8586       0.3541       1.088   Other race borrower
hispanic                         1   -0.00953    0.05732    0.0277       0.8679       0.991   Hispanic borrower
income_thou                      1   -0.00506    0.0007477 45.8752       <.0001       0.995   NFMC-reported income
                                                                                              ($ thousands)
FICOOrg                          1   -0.00201    0.0004042 24.8414       <.0001       0.998   FICO/Credit Score –
                                                                                              Original
CurrentIntRate                   1   0.13577     0.01968    47.5734      <.0001       1.145   Current Interest Rate
MrtGrdBC                         1   -0.53280    0.06616    64.8442      <.0001       0.587   Grade B/C mortgage
IntTypeARM                       1   0.18772     0.05521    11.5613      0.0007       1.206   ARM loan
IntTypeOth                       1   -0.36881    0.18346    4.0416       0.0444       0.692   Other interest type loan
OptionARM                        1   -0.43349    0.07626    32.3156      <.0001       0.648   Option ARM loan
InvAgency                        1   -0.13423    0.06250    4.6126       0.0317       0.874   Agency loan
InvGov                           1   -0.24181    0.45302    0.2849       0.5935       0.785   Government loan
InvPortfolio                     1   -0.31595    0.08229    14.7427      0.0001       0.729   Portfolio loan
Jumbo                            1   0.20218     0.07894    6.5593       0.0104       1.224   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00718    0.00231    9.6801       0.0019       0.993   Home mortgage
                                                                                              approval rate (%), 2006-
                                                                                              07
MrtgOrigMedAmt_thou              1   -0.0005758 0.0003054 3.5549         0.0594       0.999   Median amount home
                                                                                              purchase mortgages ($
                                                                                              thousands)
Unemp                            1   -0.15073    0.01677    80.7778      <.0001       0.860   Monthly unemployment
                                                                                              rate (%)
Unemp_chg_pct                    1   -0.01858    0.00142    170.7749     <.0001       0.982   Pct change in unemp.
                                                                                              rate since 1/08
Hpi                              1   0.0002282   0.0004551 0.2515        0.6160       1.000   Quarterly housing price
                                                                                              index
Hpi_chg_pct                      1   -0.04500    0.00394    130.2138     <.0001       0.956   Pct change in HPI since
                                                                                              1/08



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Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
LTV                              1   0.01358    0.00169    64.2078      <.0001       1.014   Loan-to-value ratio
LTVnot80                         1   0.13257    0.05561    5.6824       0.0171       1.142   Dummy for LTV not = 80




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Hazard Model of Time to Foreclosure - NFMC Only, Simple Program Effect:
Loans 1 Month Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 17479.701      17269.607
AIC         17479.701   17317.607
SBC         17479.701   17438.156



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 210.0939      24   <.0001
Score             205.6702     24   <.0001
Wald              211.4519     24   <.0001




                                                                                               C-8
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter    Standard                             Hazard
Variable                         DF Estimate     Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
Entered_counseling               1   0.09244     0.07161    1.6662       0.1968       1.097   Client entered counseling
black                            1   -0.18232    0.08115    5.0478       0.0247       0.833   Black borrower
asian                            1   0.09355     0.19383    0.2329       0.6294       1.098   Asian/PI borrower
othrace                          1   -0.02701    0.13168    0.0421       0.8375       0.973   Other race borrower
hispanic                         1   -0.03664    0.08850    0.1714       0.6789       0.964   Hispanic borrower
income_thou                      1   -0.00339    0.00103    10.7650      0.0010       0.997   NFMC-reported income
                                                                                              ($ thousands)
FICOOrg                          1   0.00153     0.0005907 6.7375        0.0094       1.002   FICO/Credit Score –
                                                                                              Original
CurrentIntRate                   1   0.06179     0.02525    5.9862       0.0144       1.064   Current Interest Rate
MrtGrdBC                         1   -0.39663    0.08373    22.4398      <.0001       0.673   Grade B/C mortgage
IntTypeARM                       1   0.21296     0.07993    7.0983       0.0077       1.237   ARM loan
IntTypeOth                       1   -0.22756    0.30615    0.5525       0.4573       0.796   Other interest type loan
OptionARM                        1   -0.00584    0.11778    0.0025       0.9604       0.994   Option ARM loan
InvAgency                        1   -0.33770    0.08825    14.6415      0.0001       0.713   Agency loan
InvGov                           1   -0.34963    0.41797    0.6997       0.4029       0.705   Government loan
InvPortfolio                     1   -0.29336    0.11144    6.9292       0.0085       0.746   Portfolio loan
Jumbo                            1   0.16716     0.13840    1.4588       0.2271       1.182   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00395    0.00303    1.6982       0.1925       0.996   Home mortgage approval
                                                                                              rate (%), 2006-07
MrtgOrigMedAmt_thou              1   0.0000986   0.0004386 0.0506        0.8220       1.000   Median amount home
                                                                                              purchase mortgages ($
                                                                                              thousands)
Unemp                            1   -0.00631    0.02471    0.0652       0.7985       0.994   Monthly unemployment
                                                                                              rate (%)
Unemp_chg_pct                    1   -0.02680    0.00276    93.9815      <.0001       0.974   Pct change in unemp.
                                                                                              rate since 1/08
Hpi                              1   0.0004286   0.0005537 0.5991        0.4389       1.000   Quarterly housing price
                                                                                              index
Hpi_chg_pct                      1   -0.00735    0.00819    0.8047       0.3697       0.993   Pct change in HPI since
                                                                                              1/08
LTV                              1   0.00224     0.00112    4.0521       0.0441       1.002   Loan-to-value ratio
LTVnot80                         1   0.05391     0.08465    0.4056       0.5242       1.055   Dummy for LTV not = 80




                                                                                                       C-9
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Counseling Level Effects:
Loans 1 Month Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 17479.701      17263.657
AIC         17479.701   17317.657
SBC         17479.701   17453.274



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 216.0447      27   <.0001
Score             213.3764     27   <.0001
Wald              219.0457     27   <.0001




                                                                                               C-10
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter    Standard                             Hazard
Variable                         DF Estimate     Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
level_1_intk                     1   0.07563     0.08717    0.7527       0.3856       1.079   Received level 1
                                                                                              counseling
level_2_intk                     1   0.29003     0.11825    6.0161       0.0142       1.336   Received level 2
                                                                                              counseling
level_3_intk                     1   -0.03895    0.10769    0.1308       0.7176       0.962   Received level 3
                                                                                              counseling
counseling_hours                 1   0.00442     0.00812    0.2962       0.5862       1.004   Tot indiv counseling
                                                                                              hours received
black                            1   -0.18289    0.08156    5.0281       0.0249       0.833   Black borrower
asian                            1   0.09232     0.19380    0.2269       0.6338       1.097   Asian/PI borrower
othrace                          1   -0.02873    0.13202    0.0473       0.8278       0.972   Other race borrower
hispanic                         1   -0.04077    0.08869    0.2114       0.6457       0.960   Hispanic borrower
income_thou                      1   -0.00330    0.00103    10.2039      0.0014       0.997   NFMC-reported income
                                                                                              ($ thousands)
FICOOrg                          1   0.00151     0.0005902 6.5422        0.0105       1.002   FICO/Credit Score –
                                                                                              Original
CurrentIntRate                   1   0.06171     0.02520    5.9968       0.0143       1.064   Current Interest Rate
MrtGrdBC                         1   -0.39871    0.08374    22.6687      <.0001       0.671   Grade B/C mortgage
IntTypeARM                       1   0.21507     0.07992    7.2424       0.0071       1.240   ARM loan
IntTypeOth                       1   -0.23693    0.30620    0.5987       0.4391       0.789   Other interest type loan
OptionARM                        1   -0.01025    0.11802    0.0075       0.9308       0.990   Option ARM loan
InvAgency                        1   -0.33524    0.08832    14.4060      0.0001       0.715   Agency loan
InvGov                           1   -0.34697    0.41797    0.6891       0.4065       0.707   Government loan
InvPortfolio                     1   -0.29590    0.11156    7.0348       0.0080       0.744   Portfolio loan
Jumbo                            1   0.16195     0.13869    1.3635       0.2429       1.176   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00398    0.00303    1.7262       0.1889       0.996   Home mortgage approval
                                                                                              rate (%), 2006-07
MrtgOrigMedAmt_thou              1   0.0001188   0.0004378 0.0737        0.7861       1.000   Median amount home
                                                                                              purchase mortgages ($
                                                                                              thousands)
Unemp                            1   -0.00794    0.02483    0.1024       0.7490       0.992   Monthly unemployment
                                                                                              rate (%)
Unemp_chg_pct                    1   -0.02687    0.00276    94.6483      <.0001       0.973   Pct change in unemp.
                                                                                              rate since 1/08
Hpi                              1   0.0004178   0.0005543 0.5682        0.4510       1.000   Quarterly housing price
                                                                                              index
Hpi_chg_pct                      1   -0.00774    0.00820    0.8909       0.3452       0.992   Pct change in HPI since
                                                                                              1/08
LTV                              1   0.00228     0.00112    4.1963       0.0405       1.002   Loan-to-value ratio



                                                                                                     C-11
     NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
     Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
LTVnot80                         1   0.05521    0.08476    0.4244       0.5148       1.057   Dummy for LTV not = 80




                                                                                                   C-12
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Simple Program Effect:
Loans 2 Months Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 11075.804      10914.116
AIC         11075.804   10962.116
SBC         11075.804   11074.153



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 161.6877      24   <.0001
Score             157.1078     24   <.0001
Wald              159.0210     24   <.0001




                                                                                               C-13
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
Entered_counseling               1   -0.18266   0.09729    3.5252       0.0604       0.833   Client entered
                                                                                             counseling
black                            1   -0.02122   0.09905    0.0459       0.8303       0.979   Black borrower
asian                            1   -0.34776   0.29505    1.3892       0.2385       0.706   Asian/PI borrower
othrace                          1   0.36513    0.15265    5.7216       0.0168       1.441   Other race borrower
hispanic                         1   0.23258    0.10701    4.7238       0.0297       1.262   Hispanic borrower
income_thou                      1   -0.00391   0.00135    8.4325       0.0037       0.996   NFMC-reported income
                                                                                             ($ thousands)
FICOOrg                          1   0.00214    0.0007013 9.3470        0.0022       1.002   FICO/Credit Score –
                                                                                             Original
CurrentIntRate                   1   0.09949    0.03085    10.3995      0.0013       1.105   Current Interest Rate
MrtGrdBC                         1   -0.34636   0.09843    12.3826      0.0004       0.707   Grade B/C mortgage
IntTypeARM                       1   0.12575    0.09635    1.7034       0.1918       1.134   ARM loan
IntTypeOth                       1   0.31185    0.32891    0.8989       0.3431       1.366   Other interest type loan
OptionARM                        1   -0.17535   0.14324    1.4985       0.2209       0.839   Option ARM loan
InvAgency                        1   0.02284    0.10817    0.0446       0.8328       1.023   Agency loan
InvGov                           1   -0.62709   1.00941    0.3859       0.5344       0.534   Government loan
InvPortfolio                     1   -0.03393   0.13892    0.0597       0.8070       0.967   Portfolio loan
Jumbo                            1   0.20786    0.18151    1.3115       0.2521       1.231   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00116   0.00355    0.1075       0.7431       0.999   Home mortgage
                                                                                             approval rate (%), 2006-
                                                                                             07
MrtgOrigMedAmt_thou              1   0.00226    0.0005198 18.9446       <.0001       1.002   Median amount home
                                                                                             purchase mortgages ($
                                                                                             thousands)
Unemp                            1   0.09027    0.03199    7.9610       0.0048       1.094   Monthly unemployment
                                                                                             rate (%)
Unemp_chg_pct                    1   -0.02127   0.00372    32.6888      <.0001       0.979   Pct change in unemp.
                                                                                             rate since 1/08
Hpi                              1   9.21613E-6 0.0006928 0.0002        0.9894       1.000   Quarterly housing price
                                                                                             index
Hpi_chg_pct                      1   0.07738    0.01240    38.9501      <.0001       1.080   Pct change in HPI since
                                                                                             1/08
LTV                              1   -0.00229   0.00274    0.6955       0.4043       0.998   Loan-to-value ratio
LTVnot80                         1   -0.08244   0.10785    0.5844       0.4446       0.921   Dummy for LTV not = 80




                                                                                                    C-14
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Counseling Level Effects:
Loans 2 Months Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 11075.804      10909.851
AIC         11075.804   10963.851
SBC         11075.804   11089.894



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 165.9521      27   <.0001
Score             161.8373     27   <.0001
Wald              163.5938     27   <.0001




                                                                                               C-15
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
level_1_intk                     1   -0.11712   0.13251    0.7812       0.3768       0.889   Received level 1
                                                                                             counseling
level_2_intk                     1   -0.00184   0.15928    0.0001       0.9908       0.998   Received level 2
                                                                                             counseling
level_3_intk                     1   -0.35541   0.16318    4.7438       0.0294       0.701   Received level 3
                                                                                             counseling
counseling_hours                 1   -0.01073   0.02537    0.1788       0.6724       0.989   Tot indiv counseling
                                                                                             hours received
black                            1   -0.01986   0.09933    0.0400       0.8415       0.980   Black borrower
asian                            1   -0.34615   0.29515    1.3754       0.2409       0.707   Asian/PI borrower
othrace                          1   0.34785    0.15345    5.1389       0.0234       1.416   Other race borrower
hispanic                         1   0.23477    0.10702    4.8124       0.0283       1.265   Hispanic borrower
income_thou                      1   -0.00398   0.00135    8.7553       0.0031       0.996   NFMC-reported income
                                                                                             ($ thousands)
FICOOrg                          1   0.00213    0.0007012 9.1914        0.0024       1.002   FICO/Credit Score –
                                                                                             Original
CurrentIntRate                   1   0.09932    0.03096    10.2907      0.0013       1.104   Current Interest Rate
MrtGrdBC                         1   -0.34987   0.09842    12.6362      0.0004       0.705   Grade B/C mortgage
IntTypeARM                       1   0.12944    0.09639    1.8031       0.1793       1.138   ARM loan
IntTypeOth                       1   0.28522    0.32914    0.7509       0.3862       1.330   Other interest type loan
OptionARM                        1   -0.16988   0.14332    1.4051       0.2359       0.844   Option ARM loan
InvAgency                        1   0.01600    0.10826    0.0218       0.8825       1.016   Agency loan
InvGov                           1   -0.67250   1.00962    0.4437       0.5054       0.510   Government loan
InvPortfolio                     1   -0.03286   0.13884    0.0560       0.8129       0.968   Portfolio loan
Jumbo                            1   0.21204    0.18157    1.3638       0.2429       1.236   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.0009745 0.00356    0.0749       0.7844       0.999   Home mortgage
                                                                                             approval rate (%), 2006-
                                                                                             07
MrtgOrigMedAmt_thou              1   0.00227    0.0005192 19.0828       <.0001       1.002   Median amount home
                                                                                             purchase mortgages ($
                                                                                             thousands)
Unemp                            1   0.08843    0.03194    7.6631       0.0056       1.092   Monthly unemployment
                                                                                             rate (%)
Unemp_chg_pct                    1   -0.02139   0.00371    33.2992      <.0001       0.979   Pct change in unemp.
                                                                                             rate since 1/08
Hpi                              1   -0.0000152 0.0006929 0.0005        0.9825       1.000   Quarterly housing price
                                                                                             index
Hpi_chg_pct                      1   0.07748    0.01236    39.3220      <.0001       1.081   Pct change in HPI since
                                                                                             1/08



                                                                                                    C-16
      NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
      Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
LTV                              1   -0.00241   0.00273    0.7742       0.3789       0.998   Loan-to-value ratio
LTVnot80                         1   -0.08221   0.10785    0.5810       0.4459       0.921   Dummy for LTV not = 80




                                                                                                    C-17
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Simple Program Effect:
Loans 3 Months Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 7876.830      7714.140
AIC         7876.830   7762.140
SBC         7876.830   7868.102



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 162.6901      24   <.0001
Score             153.5248     24   <.0001
Wald              158.4795     24   <.0001




                                                                                               C-18
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
Entered_counseling               1   -0.21597   0.12594    2.9406       0.0864       0.806   Client entered
                                                                                             counseling
black                            1   -0.30777   0.10899    7.9742       0.0047       0.735   Black borrower
asian                            1   -0.13187   0.28718    0.2109       0.6461       0.876   Asian/PI borrower
othrace                          1   0.16224    0.17171    0.8928       0.3447       1.176   Other race borrower
hispanic                         1   0.05883    0.12092    0.2367       0.6266       1.061   Hispanic borrower
income_thou                      1   -0.00150   0.00121    1.5432       0.2141       0.999   NFMC-reported income
                                                                                             ($ thousands)
FICOOrg                          1   0.00192    0.0008293 5.3855        0.0203       1.002   FICO/Credit Score –
                                                                                             Original
CurrentIntRate                   1   0.01587    0.03449    0.2116       0.6455       1.016   Current Interest Rate
MrtGrdBC                         1   -0.44502   0.11564    14.8100      0.0001       0.641   Grade B/C mortgage
IntTypeARM                       1   0.40676    0.11177    13.2435      0.0003       1.502   ARM loan
IntTypeOth                       1   -0.16888   0.36855    0.2100       0.6468       0.845   Other interest type loan
OptionARM                        1   -0.38367   0.16426    5.4560       0.0195       0.681   Option ARM loan
InvAgency                        1   -0.14911   0.12745    1.3688       0.2420       0.861   Agency loan
InvGov                           1   0.72194    1.01539    0.5055       0.4771       2.058   Government loan
InvPortfolio                     1   -0.29772   0.16945    3.0870       0.0789       0.743   Portfolio loan
Jumbo                            1   0.22924    0.17533    1.7095       0.1910       1.258   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00712   0.00412    2.9776       0.0844       0.993   Home mortgage
                                                                                             approval rate (%), 2006-
                                                                                             07
MrtgOrigMedAmt_thou              1   0.00122    0.0006092 3.9944        0.0457       1.001   Median amount home
                                                                                             purchase mortgages ($
                                                                                             thousands)
Unemp                            1   0.03835    0.03516    1.1897       0.2754       1.039   Monthly unemployment
                                                                                             rate (%)
Unemp_chg_pct                    1   -0.01556   0.00504    9.5505       0.0020       0.985   Pct change in unemp.
                                                                                             rate since 1/08
Hpi                              1   0.00175    0.0006876 6.5063        0.0107       1.002   Quarterly housing price
                                                                                             index
Hpi_chg_pct                      1   0.13373    0.01815    54.2883      <.0001       1.143   Pct change in HPI since
                                                                                             1/08
LTV                              1   -0.0004055 0.00295    0.0189       0.8907       1.000   Loan-to-value ratio
LTVnot80                         1   0.03975    0.12147    0.1071       0.7435       1.041   Dummy for LTV not = 80




                                                                                                    C-19
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Counseling Level Effects:
Loans 3 Months Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 7876.830      7707.838
AIC         7876.830   7761.838
SBC         7876.830   7881.045



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 168.9926      27   <.0001
Score             160.1399     27   <.0001
Wald              163.8810     27   <.0001




                                                                                               C-20
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
level_1_intk                     1   -0.06883   0.17142    0.1612       0.6880       0.933   Received level 1
                                                                                             counseling
level_2_intk                     1   0.06741    0.22214    0.0921       0.7615       1.070   Received level 2
                                                                                             counseling
level_3_intk                     1   -0.48250   0.21502    5.0356       0.0248       0.617   Received level 3
                                                                                             counseling
counseling_hours                 1   -0.01761   0.03461    0.2590       0.6108       0.983   Tot indiv counseling
                                                                                             hours received
black                            1   -0.31969   0.10884    8.6269       0.0033       0.726   Black borrower
asian                            1   -0.14868   0.28722    0.2680       0.6047       0.862   Asian/PI borrower
othrace                          1   0.13232    0.17278    0.5865       0.4438       1.141   Other race borrower
hispanic                         1   0.05226    0.12114    0.1861       0.6662       1.054   Hispanic borrower
income_thou                      1   -0.00136   0.00121    1.2754       0.2588       0.999   NFMC-reported income
                                                                                             ($ thousands)
FICOOrg                          1   0.00198    0.0008283 5.7150        0.0168       1.002   FICO/Credit Score –
                                                                                             Original
CurrentIntRate                   1   0.01525    0.03439    0.1966       0.6574       1.015   Current Interest Rate
MrtGrdBC                         1   -0.43433   0.11534    14.1792      0.0002       0.648   Grade B/C mortgage
IntTypeARM                       1   0.41052    0.11158    13.5365      0.0002       1.508   ARM loan
IntTypeOth                       1   -0.14445   0.36883    0.1534       0.6953       0.865   Other interest type loan
OptionARM                        1   -0.38110   0.16459    5.3610       0.0206       0.683   Option ARM loan
InvAgency                        1   -0.14343   0.12713    1.2728       0.2592       0.866   Agency loan
InvGov                           1   0.70627    1.01704    0.4822       0.4874       2.026   Government loan
InvPortfolio                     1   -0.27909   0.16902    2.7265       0.0987       0.756   Portfolio loan
Jumbo                            1   0.22611    0.17560    1.6580       0.1979       1.254   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00723   0.00413    3.0669       0.0799       0.993   Home mortgage
                                                                                             approval rate (%), 2006-
                                                                                             07
MrtgOrigMedAmt_thou              1   0.00121    0.0006101 3.9138        0.0479       1.001   Median amount home
                                                                                             purchase mortgages ($
                                                                                             thousands)
Unemp                            1   0.03339    0.03537    0.8915       0.3451       1.034   Monthly unemployment
                                                                                             rate (%)
Unemp_chg_pct                    1   -0.01519   0.00503    9.1062       0.0025       0.985   Pct change in unemp.
                                                                                             rate since 1/08
Hpi                              1   0.00170    0.0006880 6.1279        0.0133       1.002   Quarterly housing price
                                                                                             index
Hpi_chg_pct                      1   0.13351    0.01814    54.1506      <.0001       1.143   Pct change in HPI since
                                                                                             1/08



                                                                                                    C-21
      NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
      Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
LTV                              1   -0.0005270 0.00292    0.0325       0.8569       0.999   Loan-to-value ratio
LTVnot80                         1   0.06027    0.12197    0.2441       0.6212       1.062   Dummy for LTV not = 80




                                                                                                   C-22
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        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Simple Program Effect:
Loans 4+ Months Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 17427.631      17280.315
AIC         17427.631   17328.315
SBC         17427.631   17451.011



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 147.3159      24   <.0001
Score             148.3218     24   <.0001
Wald              149.5049     24   <.0001




                                                                                               C-23
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        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter    Standard                             Hazard
Variable                         DF Estimate     Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
Entered_counseling               1   0.09511     0.08350    1.2975       0.2547       1.100   Client entered counseling
black                            1   -0.11110    0.07372    2.2709       0.1318       0.895   Black borrower
asian                            1   0.14381     0.24465    0.3455       0.5567       1.155   Asian/PI borrower
othrace                          1   -0.06007    0.13575    0.1958       0.6581       0.942   Other race borrower
hispanic                         1   0.02162     0.09624    0.0505       0.8222       1.022   Hispanic borrower
income_thou                      1   -0.00202    0.0009191 4.8328        0.0279       0.998   NFMC-reported income
                                                                                              ($ thousands)
FICOOrg                          1   0.0007457   0.0005807 1.6490        0.1991       1.001   FICO/Credit Score –
                                                                                              Original
CurrentIntRate                   1   -0.00718    0.02268    0.1002       0.7516       0.993   Current Interest Rate
MrtGrdBC                         1   -0.18701    0.07950    5.5329       0.0187       0.829   Grade B/C mortgage
IntTypeARM                       1   0.18802     0.07236    6.7511       0.0094       1.207   ARM loan
IntTypeOth                       1   0.27745     0.30632    0.8204       0.3651       1.320   Other interest type loan
OptionARM                        1   0.26660     0.15261    3.0516       0.0807       1.306   Option ARM loan
InvAgency                        1   -0.15139    0.08766    2.9826       0.0842       0.860   Agency loan
InvGov                           1   0.07350     0.58739    0.0157       0.9004       1.076   Government loan
InvPortfolio                     1   -0.06083    0.11941    0.2595       0.6105       0.941   Portfolio loan
Jumbo                            1   -0.12202    0.14016    0.7579       0.3840       0.885   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00146    0.00281    0.2685       0.6043       0.999   Home mortgage approval
                                                                                              rate (%), 2006-07
MrtgOrigMedAmt_thou              1   0.00130     0.0004274 9.3120        0.0023       1.001   Median amount home
                                                                                              purchase mortgages ($
                                                                                              thousands)
Unemp                            1   0.08700     0.02399    13.1475      0.0003       1.091   Monthly unemployment
                                                                                              rate (%)
Unemp_chg_pct                    1   -0.02304    0.00360    40.9810      <.0001       0.977   Pct change in unemp.
                                                                                              rate since 1/08
Hpi                              1   0.00201     0.0005007 16.1926       <.0001       1.002   Quarterly housing price
                                                                                              index
Hpi_chg_pct                      1   0.05352     0.01156    21.4412      <.0001       1.055   Pct change in HPI since
                                                                                              1/08
LTV                              1   0.00429     0.00120    12.8072      0.0003       1.004   Loan-to-value ratio
LTVnot80                         1   0.10527     0.09715    1.1743       0.2785       1.111   Dummy for LTV not = 80




                                                                                                     C-24
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        Preliminary Analysis of Program Effects



Hazard Model of Time to Foreclosure - NFMC Only, Counseling Level Effects:
Loans 4+ Months Delinquent as of Jan. 2008

Model Fit Statistics
          Without    With
Criterion Covariates Covariates
-2 LOG L 17427.631      17276.669
AIC         17427.631   17330.669
SBC         17427.631   17468.702



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square   DF Pr > ChiSq
Likelihood Ratio 150.9618      27   <.0001
Score             152.9289     27   <.0001
Wald              153.9636     27   <.0001




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        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter    Standard                             Hazard
Variable                         DF Estimate     Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
level_1_intk                     1   0.18663     0.10194    3.3516       0.0671       1.205   Received level 1
                                                                                              counseling
level_2_intk                     1   0.01494     0.15350    0.0095       0.9225       1.015   Received level 2
                                                                                              counseling
level_3_intk                     1   -0.05798    0.13133    0.1949       0.6589       0.944   Received level 3
                                                                                              counseling
counseling_hours                 1   0.00539     0.00827    0.4245       0.5147       1.005   Tot indiv counseling
                                                                                              hours received
black                            1   -0.10095    0.07392    1.8647       0.1721       0.904   Black borrower
asian                            1   0.12182     0.24507    0.2471       0.6191       1.130   Asian/PI borrower
othrace                          1   -0.07653    0.13613    0.3161       0.5740       0.926   Other race borrower
hispanic                         1   0.02312     0.09626    0.0577       0.8102       1.023   Hispanic borrower
income_thou                      1   -0.00204    0.0009208 4.9290        0.0264       0.998   NFMC-reported income
                                                                                              ($ thousands)
FICOOrg                          1   0.0007826   0.0005820 1.8080        0.1788       1.001   FICO/Credit Score –
                                                                                              Original
CurrentIntRate                   1   -0.00502    0.02268    0.0490       0.8249       0.995   Current Interest Rate
MrtGrdBC                         1   -0.18584    0.07951    5.4636       0.0194       0.830   Grade B/C mortgage
IntTypeARM                       1   0.18693     0.07236    6.6739       0.0098       1.206   ARM loan
IntTypeOth                       1   0.26435     0.30641    0.7443       0.3883       1.303   Other interest type loan
OptionARM                        1   0.26879     0.15270    3.0985       0.0784       1.308   Option ARM loan
InvAgency                        1   -0.15280    0.08765    3.0391       0.0813       0.858   Agency loan
InvGov                           1   0.05068     0.58766    0.0074       0.9313       1.052   Government loan
InvPortfolio                     1   -0.05033    0.11963    0.1770       0.6740       0.951   Portfolio loan
Jumbo                            1   -0.13531    0.14044    0.9283       0.3353       0.873   Jumbo loan
ApprovalRateHomePurch_06_07      1   -0.00146    0.00281    0.2683       0.6045       0.999   Home mortgage approval
                                                                                              rate (%), 2006-07
MrtgOrigMedAmt_thou              1   0.00132     0.0004270 9.5502        0.0020       1.001   Median amount home
                                                                                              purchase mortgages ($
                                                                                              thousands)
Unemp                            1   0.08698     0.02401    13.1278      0.0003       1.091   Monthly unemployment
                                                                                              rate (%)
Unemp_chg_pct                    1   -0.02299    0.00359    41.1328      <.0001       0.977   Pct change in unemp.
                                                                                              rate since 1/08
Hpi                              1   0.00200     0.0005008 16.0280       <.0001       1.002   Quarterly housing price
                                                                                              index
Hpi_chg_pct                      1   0.05388     0.01150    21.9396      <.0001       1.055   Pct change in HPI since
                                                                                              1/08
LTV                              1   0.00435     0.00119    13.2737      0.0003       1.004   Loan-to-value ratio



                                                                                                     C-26
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     Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                    Parameter   Standard                             Hazard
Variable                         DF Estimate    Error      Chi-Square   Pr > ChiSq   Ratio  Variable Label
LTVnot80                         1   0.10655    0.09718    1.2021       0.2729       1.112   Dummy for LTV not = 80




                                                                                                   C-27
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                                                                                       C-28
 NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
 Preliminary Analysis of Program Effects




        Appendix D: Parameter Estimates for
LOGIT Model of Foreclosure Cure – NFMC vs. Non-NFMC




                                                                                        D-1
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Preliminary Analysis of Program Effects




                                                                                       D-2
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



LOGIT Model of Foreclosure Cure – NFMC vs. Non-NFMC

Model Fit Statistics
                       Intercept
          Intercept    and
Criterion Only         Covariates
AIC         64116.729 62010.229
SC          64126.364 62337.825
-2 Log L    64114.729 61942.229



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square DF Pr > ChiSq
Likelihood Ratio 2172.5000    33    <.0001
Score             2128.9673   33    <.0001
Wald              2044.1966   33    <.0001




                                                                                               D-3
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                     Standard Wald
Parameter                DF Estimate Error    Chi-Square Pr > ChiSq
Intercept                1   -0.4417    0.3383     1.7051     0.1916
Entered_counseling       1   0.4912     0.0254     372.7518   <.0001
Months_foreclosure       1   -0.0137    0.00288    22.6011    <.0001
Delinqintk1              1   -0.5016    0.0784     40.9060    <.0001
Delinqintk2              1   -0.5731    0.0677     71.7421    <.0001
Delinqintk3              1   -0.6611    0.0631     109.6096   <.0001
Delinqintk4              1   -0.9281    0.0484     367.3387   <.0001
black                    1   0.2275     0.0294     59.6906    <.0001
asian                    1   -0.1477    0.0831     3.1617     0.0754
othrace                  1   -0.0369    0.0553     0.4453     0.5046
hispanic                 1   -0.1158    0.0347     11.1530    0.0008
year03                   1   0.00897    0.0864     0.0108     0.9173
year04                   1   0.00466    0.0773     0.0036     0.9519
year05                   1   -0.0966    0.0739     1.7102     0.1910
year06                   1   -0.1714    0.0727     5.5664     0.0183
year07                   1   -0.2294    0.0750     9.3563     0.0022
FICOOrg                  1   -0.00263   0.000201   170.8402   <.0001
CurrentIntRate           1   -0.00646   0.00965    0.4490     0.5028
MrtGrdBC                 1   0.1138     0.0318     12.8422    0.0003
IntTypeARM               1   -0.0670    0.0299     5.0082     0.0252
IntTypeOth               1   -0.0411    0.1114     0.1362     0.7121
OptionARM                1   -0.2428    0.0448     29.3375    <.0001
InvAgency                1   0.0211     0.0343     0.3787     0.5383
InvGov                   1   -0.3804    0.3039     1.5673     0.2106
InvPortfolio             1   0.1169     0.0402     8.4673     0.0036
Jumbo                    1   -0.1390    0.0425     10.7187    0.0011
ApprovalRateHomePurc     1   0.00489    0.00111    19.4185    <.0001
MrtgOrigMedAmt_thou      1   0.000230 0.000123     3.4786     0.0622
Unemp                    1   -0.0330    0.00851    15.0406    0.0001
Unemp_chg_pct            1   -0.00482   0.000785   37.7297    <.0001
Hpi                      1   -0.00060   0.000171   12.4783    0.0004
Hpi_chg_pct              1   0.0131     0.00229    32.5775    <.0001
LTV                      1   -0.00196   0.000598   10.6901    0.0011



                                                                                               D-4
     NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
     Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                   Standard Wald
Parameter              DF Estimate Error    Chi-Square Pr > ChiSq
LTVnot80               1   0.0215    0.0342   0.3936     0.5304




                                                                                            D-5
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Odds Ratio Estimates
                         Point    95% Wald
Effect                   Estimate Confidence Limits
Entered_counseling       1.634     1.555    1.718
Months_foreclosure       0.986     0.981    0.992
Delinqintk1              0.606     0.519    0.706
Delinqintk2              0.564     0.494    0.644
Delinqintk3              0.516     0.456    0.584
Delinqintk4              0.395     0.360    0.435
black                    1.255     1.185    1.330
asian                    0.863     0.733    1.015
othrace                  0.964     0.865    1.074
hispanic                 0.891     0.832    0.953
year03                   1.009     0.852    1.195
year04                   1.005     0.863    1.169
year05                   0.908     0.785    1.049
year06                   0.842     0.731    0.971
year07                   0.795     0.686    0.921
FICOOrg                  0.997     0.997    0.998
CurrentIntRate           0.994     0.975    1.013
MrtGrdBC                 1.121     1.053    1.193
IntTypeARM               0.935     0.882    0.992
IntTypeOth               0.960     0.772    1.194
OptionARM                0.784     0.718    0.856
InvAgency                1.021     0.955    1.092
InvGov                   0.684     0.377    1.240
InvPortfolio             1.124     1.039    1.216
Jumbo                    0.870     0.801    0.946
ApprovalRateHomePurc     1.005     1.003    1.007
MrtgOrigMedAmt_thou      1.000     1.000    1.000
Unemp                    0.968     0.952    0.984
Unemp_chg_pct            0.995     0.994    0.997
Hpi                      0.999     0.999    1.000
Hpi_chg_pct              1.013     1.009    1.018
LTV                      0.998     0.997    0.999
LTVnot80                 1.022     0.955    1.093



                                                                                               D-6
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects




Association of Predicted Probabilities and
Observed Responses
Percent Concordant   63.7        Somers' D 0.289
Percent Discordant   34.8        Gamma       0.293
Percent Tied         1.4         Tau-a       0.043
Pairs                961510446 c             0.644




                                                                                               D-7
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




                                                                                       D-8
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




         Appendix E: Parameter Estimates for
     LOGIT Model of Foreclosure Cure – NFMC Only




                                                                                       E-1
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




                                                                                       E-2
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



LOGIT Model of Foreclosure Cure – NFMC Only, Simple Counseling Effect

Model Fit Statistics
                       Intercept
          Intercept    and
Criterion Only         Covariates
AIC         42787.184 42080.989
SC          42796.302 42363.662
-2 Log L    42785.184 42018.989



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square DF Pr > ChiSq
Likelihood Ratio 766.1950     30    <.0001
Score             733.3369    30    <.0001
Wald              719.1196    30    <.0001




                                                                                               E-3
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                     Standard Wald
Parameter                DF Estimate Error    Chi-Square Pr > ChiSq
Intercept                1   -1.8627    0.4024     21.4314    <.0001
Months_foreclosure       1   -0.00026   0.00337    0.0059     0.9389
Entered_counseling       1   0.4575     0.0314     211.9508   <.0001
year03                   1   0.00891    0.0862     0.0107     0.9177
year04                   1   0.00247    0.0810     0.0009     0.9757
year05                   1   -0.0677    0.0761     0.7912     0.3737
year06                   1   -0.1108    0.0744     2.2208     0.1362
year07                   1   -0.1678    0.0772     4.7210     0.0298
FICOOrg                  1   -0.00209   0.000251   69.3734    <.0001
CurrentIntRate           1   -0.0226    0.0114     3.9761     0.0462
MrtGrdBC                 1   0.1270     0.0355     12.7725    0.0004
IntTypeARM               1   -0.0234    0.0355     0.4369     0.5086
IntTypeOth               1   -0.0619    0.1332     0.2162     0.6420
OptionARM                1   -0.1696    0.0578     8.6202     0.0033
InvAgency                1   0.0211     0.0414     0.2585     0.6111
InvGov                   1   -0.3472    0.3188     1.1866     0.2760
InvPortfolio             1   0.0775     0.0522     2.2023     0.1378
Jumbo                    1   -0.0208    0.0595     0.1221     0.7267
ApprovalRateHomePurc     1   0.00564    0.00130    18.7593    <.0001
MrtgOrigMedAmt_thou      1   -0.00019   0.000201   0.8565     0.3547
Unemp                    1   -0.0267    0.0107     6.2711     0.0123
Unemp_chg_pct            1   -0.00330   0.000947   12.1308    0.0005
Hpi                      1   -0.00062   0.000276   5.1088     0.0238
Hpi_chg_pct              1   0.0127     0.00275    21.2614    <.0001
LTV                      1   -0.00005   0.000699   0.0056     0.9404
LTVnot80                 1   0.00387    0.0388     0.0100     0.9205
black                    1   0.1875     0.0342     30.0319    <.0001
asian                    1   -0.1175    0.0966     1.4808     0.2236
othrace                  1   -0.0227    0.0584     0.1515     0.6971
hispanic                 1   -0.1303    0.0403     10.4439    0.0012
income                   1   -1.64E-8   3.517E-8   0.2168     0.6415




                                                                                               E-4
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Odds Ratio Estimates
                         Point    95% Wald
Effect                   Estimate Confidence Limits
Months_foreclosure       1.000     0.993    1.006
Entered_counseling       1.580     1.486    1.681
year03                   1.009     0.852    1.195
year04                   1.002     0.855    1.175
year05                   0.935     0.805    1.085
year06                   0.895     0.774    1.036
year07                   0.845     0.727    0.984
FICOOrg                  0.998     0.997    0.998
CurrentIntRate           0.978     0.956    1.000
MrtGrdBC                 1.135     1.059    1.217
IntTypeARM               0.977     0.911    1.047
IntTypeOth               0.940     0.724    1.220
OptionARM                0.844     0.754    0.945
InvAgency                1.021     0.942    1.108
InvGov                   0.707     0.378    1.320
InvPortfolio             1.081     0.975    1.197
Jumbo                    0.979     0.872    1.101
ApprovalRateHomePurc     1.006     1.003    1.008
MrtgOrigMedAmt_thou      1.000     0.999    1.000
Unemp                    0.974     0.953    0.994
Unemp_chg_pct            0.997     0.995    0.999
Hpi                      0.999     0.999    1.000
Hpi_chg_pct              1.013     1.007    1.018
LTV                      1.000     0.999    1.001
LTVnot80                 1.004     0.930    1.083
black                    1.206     1.128    1.290
asian                    0.889     0.736    1.074
othrace                  0.978     0.872    1.096
hispanic                 0.878     0.811    0.950
income                   1.000     1.000    1.000




                                                                                               E-5
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Association of Predicted Probabilities and
Observed Responses
Percent Concordant   59.3        Somers' D 0.204
Percent Discordant   39.0        Gamma       0.207
Percent Tied         1.7         Tau-a       0.036
Pairs                396221906 c             0.602




                                                                                               E-6
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



LOGIT Model of Foreclosure Cure – NFMC Only, Counseling Level Effects

Model Fit Statistics
                       Intercept
          Intercept    and
Criterion Only         Covariates
AIC         42787.184 42065.283
SC          42796.302 42375.312
-2 Log L    42785.184 41997.283



Testing Global Null Hypothesis: BETA=0
Test              Chi-Square DF Pr > ChiSq
Likelihood Ratio 787.9009     33    <.0001
Score             758.4968    33    <.0001
Wald              742.9528    33    <.0001




                                                                                               E-7
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                     Standard Wald
Parameter                DF Estimate Error    Chi-Square Pr > ChiSq
Intercept                1   -1.8525    0.4030     21.1334    <.0001
Months_foreclosure       1   -0.00057   0.00337    0.0288     0.8652
level_1_intk             1   0.4112     0.0365     126.7766   <.0001
level_2_intk             1   0.4205     0.0450     87.1698    <.0001
level_3_intk             1   0.5710     0.0398     206.0678   <.0001
counseling_hours         1   -0.00430   0.00345    1.5522     0.2128
year03                   1   0.00323    0.0863     0.0014     0.9701
year04                   1   -0.00387   0.0810     0.0023     0.9619
year05                   1   -0.0769    0.0761     1.0219     0.3121
year06                   1   -0.1193    0.0744     2.5712     0.1088
year07                   1   -0.1749    0.0773     5.1232     0.0236
FICOOrg                  1   -0.00209   0.000251   69.1857    <.0001
CurrentIntRate           1   -0.0221    0.0114     3.7867     0.0517
MrtGrdBC                 1   0.1254     0.0355     12.4416    0.0004
IntTypeARM               1   -0.0226    0.0355     0.4050     0.5245
IntTypeOth               1   -0.0594    0.1333     0.1984     0.6560
OptionARM                1   -0.1751    0.0578     9.1666     0.0025
InvAgency                1   0.0238     0.0414     0.3310     0.5651
InvGov                   1   -0.3320    0.3188     1.0847     0.2977
InvPortfolio             1   0.0787     0.0523     2.2664     0.1322
Jumbo                    1   -0.0176    0.0596     0.0871     0.7680
ApprovalRateHomePurc     1   0.00574    0.00130    19.3662    <.0001
MrtgOrigMedAmt_thou      1   -0.00017   0.000201   0.7546     0.3850
Unemp                    1   -0.0266    0.0107     6.1601     0.0131
Unemp_chg_pct            1   -0.00309   0.000950   10.6080    0.0011
Hpi                      1   -0.00058   0.000276   4.3535     0.0369
Hpi_chg_pct              1   0.0122     0.00276    19.6679    <.0001
LTV                      1   -0.00007   0.000698   0.0089     0.9250
LTVnot80                 1   0.00636    0.0388     0.0268     0.8699
black                    1   0.1773     0.0344     26.6100    <.0001
asian                    1   -0.1232    0.0966     1.6264     0.2022
othrace                  1   -0.00432   0.0586     0.0054     0.9413
hispanic                 1   -0.1413    0.0404     12.2188    0.0005



                                                                                               E-8
     NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
     Preliminary Analysis of Program Effects



Analysis of Maximum Likelihood Estimates
                                   Standard Wald
Parameter              DF Estimate Error    Chi-Square Pr > ChiSq
income                 1   -1.52E-8   3.491E-8   0.1905   0.6625




                                                                                            E-9
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Odds Ratio Estimates
                         Point    95% Wald
Effect                   Estimate Confidence Limits
Months_foreclosure       0.999     0.993    1.006
level_1_intk             1.509     1.404    1.621
level_2_intk             1.523     1.394    1.663
level_3_intk             1.770     1.637    1.913
counseling_hours         0.996     0.989    1.002
year03                   1.003     0.847    1.188
year04                   0.996     0.850    1.167
year05                   0.926     0.798    1.075
year06                   0.888     0.767    1.027
year07                   0.840     0.722    0.977
FICOOrg                  0.998     0.997    0.998
CurrentIntRate           0.978     0.957    1.000
MrtGrdBC                 1.134     1.057    1.215
IntTypeARM               0.978     0.912    1.048
IntTypeOth               0.942     0.726    1.224
OptionARM                0.839     0.749    0.940
InvAgency                1.024     0.944    1.111
InvGov                   0.717     0.384    1.340
InvPortfolio             1.082     0.977    1.199
Jumbo                    0.983     0.874    1.104
ApprovalRateHomePurc     1.006     1.003    1.008
MrtgOrigMedAmt_thou      1.000     0.999    1.000
Unemp                    0.974     0.954    0.994
Unemp_chg_pct            0.997     0.995    0.999
Hpi                      0.999     0.999    1.000
Hpi_chg_pct              1.012     1.007    1.018
LTV                      1.000     0.999    1.001
LTVnot80                 1.006     0.933    1.086
black                    1.194     1.116    1.277
asian                    0.884     0.732    1.068
othrace                  0.996     0.888    1.117
hispanic                 0.868     0.802    0.940
income                   1.000     1.000    1.000



                                                                                               E-10
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects




Association of Predicted Probabilities and
Observed Responses
Percent Concordant   59.5        Somers' D 0.206
Percent Discordant   38.8        Gamma       0.210
Percent Tied         1.7         Tau-a       0.036
Pairs                396221906 c             0.603




                                                                                               E-11
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




                                                                                       E-12
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




        Appendix F: Parameter Estimates for
      OLS Regression Models of Reduction in
Monthly Payment for Loans Receiving a Modification –
              NFMC vs. Non-NFMC




                                                                                       F-1
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




                                                                                       F-2
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



OLS Regression Model of Dollar Reduction in Monthly Mortgage Payment for Loans
Receiving a Modification – NFMC vs. Non-NFMC

Analysis of Variance
                        Sum of       Mean
Source           DF     Squares      Square     F Value Pr > F
Model            33     1788849321 54207555 100.08      <.0001
Error            12812 6939201249 541617
Corrected Total 12845 8728050570



Root MSE           735.94655 R-Square 0.2050
Dependent Mean 381.53262 Adj R-Sq      0.2029
Coeff Var          192.89217




                                                                                               F-3
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Parameter Estimates
                                                                            Parameter     Standard
Variable                        Label                                    DF Estimate      Error       t Value Pr > |t|
Intercept                       Intercept                                1   578.70111    221.12435   2.62     0.0089
Entered_counseling              Entered counseling prior to loan         1   453.68308    15.27409    29.70    <.0001
                                modification
Delinqintk1                     1 mo. late at Intake                     1   7.70845      23.37134    0.33     0.7415
Delinqintk2                     2 mos. late at Intake                    1   -61.66571    22.97037    -2.68    0.0073
Delinqintk3                      3 mos. late at Intake                   1   -105.31499   24.89884    -4.23    <.0001
Delinqintk4                      4+ mos. late at Intake                  1   -77.66252    17.89546    -4.34    <.0001
black                           Black borrower                           1   73.51204     18.25193    4.03     <.0001
asian                           Asian/PI borrower                        1   12.02673     38.54794    0.31     0.7551
othrace                         Other race borrower                      1   70.91791     35.39346    2.00     0.0451
hispanic                        Hispanic borrower                        1   72.47108     20.38125    3.56     0.0004
OriginalLoanAmt                 Original Loan Amount                     1   0.00022391 0.00001880 11.91       <.0001
year03                          Loan originated 2003                     1   15.74209     64.34586    0.24     0.8067
year04                          Loan originated 2004                     1   73.20956     56.11802    1.30     0.1921
year05                          Loan originated 2005                     1   59.53578     53.40036    1.11     0.2649
year06                          Loan originated 2006                     1   98.47679     52.56929    1.87     0.0611
year07                          Loan originated 2007                     1   165.45429    53.18987    3.11     0.0019
FICOOrg                         FICO/Credit Score – Original             1   0.08404      0.11765     0.71     0.4750
CurrentIntRate                  Current Interest Rate                    1   25.61525     5.66090     4.52     <.0001
MrtGrdBC                        Grade B/C mortgage                       1   219.89975    19.62876    11.20    <.0001
IntTypeARM                      ARM loan                                 1   141.74421    18.58635    7.63     <.0001
IntTypeOth                       Other interest type loan                1   187.60269    85.68276    2.19     0.0286
OptionARM                       Option ARM loan                          1   -249.94641   21.19385    -11.79   <.0001
InvAgency                       Agency loan                              1   -32.25953    21.32159    -1.51    0.1303
InvGov                          Government loan                          1   20.00386     199.00254   0.10     0.9199
InvPortfolio                    Portfolio loan                           1   -82.59868    18.66072    -4.43    <.0001
Jumbo                           Jumbo loan                               1   263.73629    23.08444    11.42    <.0001
ApprovalRateHomePurch_06_07     Home mortgage approval rate (%), 2006-   1   2.50386      0.68514     3.65     0.0003
                                07
MrtgOrigMedAmt_thou             Median home purchase mortgage            1   0.07415      0.04680     1.58     0.1131
                                amount, 2006-07 avg. ($1,000s)
Unemp                           Unemployment rate, Jan 08                1   -29.66799    5.52981     -5.37    <.0001
Unemp_chg_pct                    Pct change in unemp. rate, Jan-Dec 08   1   -0.43518     0.52751     -0.82    0.4094
Hpi                             House price index, 2008Q1                1   0.24179      0.09303     2.60     0.0094
Hpi_chg_pct                     Pct change in house price index,         1   -9.98384     1.22405     -8.16    <.0001
                                2008Q1-2008Q4


                                                                                                      F-4
      NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
      Preliminary Analysis of Program Effects



Parameter Estimates
                                                                      Parameter    Standard
Variable                      Label                                DF Estimate     Error      t Value Pr > |t|
LTV                           Loan-to-value ratio                  1   0.40650     0.31388    1.30     0.1953
LTVnot80                      Dummy for LTV not = 80               1   -63.88000   19.76410   -3.23    0.0012




                                                                                              F-5
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



OLS Regression Model of Percentage Reduction in Monthly Mortgage Payment for Loans
Receiving a Modification – NFMC vs. Non-NFMC

Analysis of Variance
                        Sum of Mean
Source           DF     Squares Square        F Value Pr > F
Model            33     1814710 54991         188.88   <.0001
Error            12812 3730160 291.14583
Corrected Total 12845 5544871


Root MSE           17.06300    R-Square 0.3273
Dependent Mean 13.35022        Adj R-Sq   0.3255
Coeff Var          127.81057




                                                                                               F-6
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Parameter Estimates
                                                                           Parameter    Standard
Variable                        Label                                   DF Estimate     Error       t Value Pr > |t|
Intercept                       Intercept                               1   -3.79655    5.12679     -0.74    0.4590
Entered_counseling              Entered counseling prior to loan        1   17.20146    0.35413     48.57    <.0001
                                modification
Delinqintk1                     1 mo. late at Intake                    1   -0.02915    0.54187     -0.05    0.9571
Delinqintk2                     2 mos. late at Intake                   1   -1.60648    0.53257     -3.02    0.0026
Delinqintk3                     3 mos. late at Intake                   1   -2.89568    0.57728     -5.02    <.0001
Delinqintk4                     4+ mos. late at Intake                  1   -3.60159    0.41491     -8.68    <.0001
black                           Black borrower                          1   0.55581     0.42317     1.31     0.1891
asian                            Asian/PI borrower                      1   0.54408     0.89374     0.61     0.5427
othrace                         Other race borrower                     1   -1.17618    0.82060     -1.43    0.1518
hispanic                        Hispanic borrower                       1   0.29855     0.47254     0.63     0.5275
OriginalLoanAmt                 Original Loan Amount                    1   -9.01607E-7 4.359694E-7 -2.07    0.0387
year03                          Loan originated 2003                    1   -0.34265    1.49187     -0.23    0.8183
year04                          Loan originated 2004                    1   2.88026     1.30110     2.21     0.0269
year05                          Loan originated 2005                    1   2.42250     1.23809     1.96     0.0504
year06                          Loan originated 2006                    1   3.57255     1.21882     2.93     0.0034
year07                          Loan originated 2007                    1   5.30619     1.23321     4.30     <.0001
FICOOrg                         FICO/Credit Score – Original            1   0.01499     0.00273     5.50     <.0001
CurrentIntRate                  Current Interest Rate                   1   1.37957     0.13125     10.51    <.0001
MrtGrdBC                        Grade B/C mortgage                      1   7.15814     0.45509     15.73    <.0001
IntTypeARM                      ARM loan                                1   4.84446     0.43093     11.24    <.0001
IntTypeOth                      Other interest type loan                1   3.83822     1.98656     1.93     0.0534
OptionARM                       Option ARM loan                         1   -4.37085    0.49138     -8.90    <.0001
InvAgency                       Agency loan                             1   -0.14465    0.49434     -0.29    0.7698
InvGov                          Government loan                         1   0.84451     4.61389     0.18     0.8548
InvPortfolio                    Portfolio loan                          1   2.05326     0.43265     4.75     <.0001
Jumbo                           Jumbo loan                              1   0.35559     0.53522     0.66     0.5065
ApprovalRateHomePurch_06_07     Home mortgage approval rate (%),        1   -0.00495    0.01589     -0.31    0.7553
                                2006-07
MrtgOrigMedAmt_thou             Median home purchase mortgage           1   0.00107     0.00108     0.99     0.3239
                                amount, 2006-07 avg. ($1,000s)
Unemp                           Unemployment rate, Jan 08               1   -0.21227    0.12821     -1.66    0.0978
Unemp_chg_pct                   Pct change in unemp. rate, Jan-Dec 08   1   0.00693     0.01223     0.57     0.5708
Hpi                             House price index, 2008Q1               1   0.00126     0.00216     0.58     0.5591
Hpi_chg_pct                     Pct change in house price index,        1   -0.15638    0.02838     -5.51    <.0001
                                2008Q1-2008Q4


                                                                                                    F-7
      NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
      Preliminary Analysis of Program Effects



Parameter Estimates
                                                                     Parameter    Standard
Variable                      Label                               DF Estimate     Error      t Value Pr > |t|
LTV                           Loan-to-value ratio                 1   -0.00786    0.00728    -1.08    0.2801
LTVnot80                      Dummy for LTV not = 80              1   -1.60091    0.45823    -3.49    0.0005




                                                                                             F-8
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects




        Appendix G: Parameter Estimates for
      OLS Regression Models of Reduction in
Monthly Payment for Loans Receiving a Modification –
                    NFMC Only




                                                                                       G-1
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



OLS Regression Model of Dollar Reduction in Monthly Mortgage Payment for Loans
Receiving a Modification – NFMC Only, Simple Counseling Effect

Analysis of Variance
                       Sum of       Mean
Source           DF    Squares      Square      F Value Pr > F
Model            30    1589742495 52991416 152.41       <.0001
Error            8010 2785012384 347692
Corrected Total 8040 4374754879



Root MSE           589.65408 R-Square 0.3634
Dependent Mean 485.58861 Adj R-Sq      0.3610
Coeff Var          121.43079




                                                                                               G-2
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Parameter Estimates
                                                                             Parameter     Standard
Variable                        Label                                     DF Estimate      Error       t Value Pr > |t|
Intercept                       Intercept                                 1   -63.21151    227.94750   -0.28    0.7816
Entered_counseling              Entered counseling prior to loan          1   455.56486    15.43422    29.52    <.0001
                                modification
black                           Black borrower                            1   80.76390     17.53717    4.61     <.0001
asian                            Asian/PI borrower                        1   -23.99347    41.63724    -0.58    0.5645
othrace                         Other race borrower                       1   39.37392     30.71839    1.28     0.2000
hispanic                        Hispanic borrower                         1   49.18528     19.68973    2.50     0.0125
income                          Household/family income ($)               1   0.00013306 0.00017192 0.77        0.4390
OriginalLoanAmt                 Original Loan Amount                      1   0.00102      0.00006399 15.93     <.0001
year03                          Loan originated 2003                      1   4.59206      51.64067    0.09     0.9291
year04                          Loan originated 2004                      1   15.17457     47.71769    0.32     0.7505
year05                          Loan originated 2005                      1   -75.88225    44.11758    -1.72    0.0855
year06                          Loan originated 2006                      1   -35.96589    43.06811    -0.84    0.4037
year07                          Loan originated 2007                      1   59.29702     43.81796    1.35     0.1760
FICOOrg                         FICO/Credit Score – Original              1   0.47233      0.12536     3.77     0.0002
CurrentIntRate                  Current Interest Rate                     1   49.64159     5.53102     8.98     <.0001
MrtGrdBC                        Grade B/C mortgage                        1   274.90823    17.80461    15.44    <.0001
IntTypeARM                       ARM loan                                 1   82.31973     18.16552    4.53     <.0001
IntTypeOth                       Other interest type loan                 1   178.27832    87.91079    2.03     0.0426
OptionARM                       Option ARM loan                           1   -317.92802   21.21674    -14.98   <.0001
InvAgency                       Agency loan                               1   -108.92284   21.96418    -4.96    <.0001
InvGov                          Government loan                           1   -44.71718    180.42896   -0.25    0.8043
InvPortfolio                    Portfolio loan                            1   -102.41478   20.13356    -5.09    <.0001
Jumbo                           Jumbo loan                                1   156.79870    29.40610    5.33     <.0001
ApprovalRateHomePurch_06_07      Home mortgage approval rate (%), 2006-   1   2.76000      0.66840     4.13     <.0001
                                 07
MrtgOrigMedAmt_thou             Median home purchase mortgage             1   0.92176      0.10373     8.89     <.0001
                                amount, 2006-07 avg. ($1,000s)
Unemp                            Unemployment rate, Jan 08                1   -35.46920    5.84277     -6.07    <.0001
Unemp_chg_pct                    Pct change in unemp. rate, Jan-Dec 08    1   -0.47622     0.52898     -0.90    0.3680
Hpi                              House price index, 2008Q1                1   -0.12761     0.13993     -0.91    0.3618
Hpi_chg_pct                      Pct change in house price index,         1   -9.14796     1.29065     -7.09    <.0001
                                 2008Q1-2008Q4
LTV                              Loan-to-value ratio                      1   0.57529      0.41882     1.37     0.1696
LTVnot80                         Dummy for LTV not = 80                   1   -58.32927    18.67939    -3.12    0.0018




                                                                                                       G-3
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



OLS Regression Model of Dollar Reduction in Monthly Mortgage Payment for Loans
Receiving a Modification – NFMC Only, Counseling Level Effects

Analysis of Variance
                       Sum of       Mean
Source           DF    Squares      Square      F Value Pr > F
Model            33    1609812754 48782205 141.27       <.0001
Error            8007 2764942125 345316
Corrected Total 8040 4374754879



Root MSE           587.63561 R-Square 0.3680
Dependent Mean 485.58861 Adj R-Sq      0.3654
Coeff Var          121.01512




                                                                                               G-4
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Parameter Estimates
                                                                             Parameter     Standard
Variable                        Label                                     DF Estimate      Error       t Value Pr > |t|
Intercept                       Intercept                                 1   -148.01517   227.45540   -0.65    0.5152
level_1_intk                    Received Level 1 Counseling               1   452.74745    17.70409    25.57    <.0001
level_2_intk                    Received Level 2 Counseling               1   357.33204    23.21648    15.39    <.0001
level_3_intk                    Received Level 3 Counseling               1   523.06107    18.93363    27.63    <.0001
counseling_hours                Tot Indiv Foreclosure Counseling Hours    1   -2.49106     1.24876     -1.99    0.0461
                                Received
black                           Black borrower                            1   76.13699     17.56522    4.33     <.0001
asian                            Asian/PI borrower                        1   -29.05545    41.50280    -0.70    0.4839
othrace                         Other race borrower                       1   42.61960     30.62268    1.39     0.1640
hispanic                        Hispanic borrower                         1   48.24353     19.66342    2.45     0.0142
income                          Household/family income ($)               1   0.00011430 0.00017146 0.67        0.5050
OriginalLoanAmt                 Original Loan Amount                      1   0.00102      0.00006377 15.93     <.0001
year03                          Loan originated 2003                      1   2.41659      51.46712    0.05     0.9626
year04                          Loan originated 2004                      1   10.76974     47.56157    0.23     0.8209
year05                          Loan originated 2005                      1   -75.91992    43.97154    -1.73    0.0843
year06                          Loan originated 2006                      1   -39.15135    42.92958    -0.91    0.3618
year07                          Loan originated 2007                      1   54.90199     43.67360    1.26     0.2088
FICOOrg                         FICO/Credit Score – Original              1   0.46723      0.12495     3.74     0.0002
CurrentIntRate                  Current Interest Rate                     1   50.12918     5.51293     9.09     <.0001
MrtGrdBC                        Grade B/C mortgage                        1   271.98418    17.76056    15.31    <.0001
IntTypeARM                       ARM loan                                 1   79.65113     18.10769    4.40     <.0001
IntTypeOth                       Other interest type loan                 1   183.38578    87.61943    2.09     0.0364
OptionARM                       Option ARM loan                           1   -309.39208   21.17524    -14.61   <.0001
InvAgency                       Agency loan                               1   -104.51680   21.91086    -4.77    <.0001
InvGov                          Government loan                           1   -46.80795    179.81882   -0.26    0.7946
InvPortfolio                    Portfolio loan                            1   -100.78603   20.06931    -5.02    <.0001
Jumbo                           Jumbo loan                                1   159.27927    29.30815    5.43     <.0001
ApprovalRateHomePurch_06_07      Home mortgage approval rate (%), 2006-   1   2.62235      0.66648     3.93     <.0001
                                 07
MrtgOrigMedAmt_thou             Median home purchase mortgage             1   0.92176      0.10340     8.91     <.0001
                                amount, 2006-07 avg. ($1,000s)
Unemp                            Unemployment rate, Jan 08                1   -33.54541    5.82921     -5.75    <.0001
Unemp_chg_pct                    Pct change in unemp. rate, Jan-Dec 08    1   -0.19468     0.52889     -0.37    0.7128
Hpi                              House price index, 2008Q1                1   -0.11655     0.13950     -0.84    0.4035
Hpi_chg_pct                      Pct change in house price index,         1   -8.70570     1.28875     -6.76    <.0001
                                 2008Q1-2008Q4


                                                                                                       G-5
      NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
      Preliminary Analysis of Program Effects



Parameter Estimates
                                                                      Parameter    Standard
Variable                      Label                                DF Estimate     Error      t Value Pr > |t|
LTV                           Loan-to-value ratio                  1   0.60506     0.41741    1.45     0.1472
LTVnot80                      Dummy for LTV not = 80               1   -55.53676   18.62112   -2.98    0.0029




                                                                                              G-6
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



OLS Regression Model of Percentage Reduction in Monthly Mortgage Payment for Loans
Receiving a Modification – NFMC Only, Simple Counseling Effect

Analysis of Variance
                       Sum of Mean
Source           DF    Squares Square      F Value Pr > F
Model            30    1212580 40419       141.96   <.0001
Error            8010 2280622 284.72191
Corrected Total 8040 3493203



Root MSE           16.87370 R-Square 0.3471
Dependent Mean 18.61660 Adj R-Sq       0.3447
Coeff Var          90.63796




                                                                                               G-7
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Parameter Estimates
                                                                            Parameter     Standard
Variable                        Label                                    DF Estimate      Error      t Value Pr > |t|
Intercept                       Intercept                                1   -10.52187    6.52301    -1.61    0.1068
Entered_counseling              Entered counseling prior to loan         1   18.70370     0.44167    42.35    <.0001
                                modification
black                           Black borrower                           1   1.35987      0.50185    2.71     0.0067
asian                           Asian/PI borrower                        1   0.43484      1.19150    0.36     0.7152
othrace                         Other race borrower                      1   -0.55596     0.87905    -0.63    0.5271
hispanic                        Hispanic borrower                        1   0.81407      0.56345    1.44     0.1486
income                          Household/family income ($)              1   -0.00000968 0.00000492 -1.97     0.0492
OriginalLoanAmt                 Original Loan Amount                     1   0.00000623   0.00000183 3.40     0.0007
year03                          Loan originated 2003                     1   -0.35684     1.47776    -0.24    0.8092
year04                          Loan originated 2004                     1   1.25879      1.36550    0.92     0.3566
year05                          Loan originated 2005                     1   0.58101      1.26248    0.46     0.6454
year06                          Loan originated 2006                     1   1.30162      1.23245    1.06     0.2909
year07                          Loan originated 2007                     1   4.07074      1.25391    3.25     0.0012
FICOOrg                         FICO/Credit Score – Original             1   0.02848      0.00359    7.94     <.0001
CurrentIntRate                  Current Interest Rate                    1   1.75290      0.15828    11.07    <.0001
MrtGrdBC                        Grade B/C mortgage                       1   8.28927      0.50950    16.27    <.0001
IntTypeARM                      ARM loan                                 1   3.55295      0.51983    6.83     <.0001
IntTypeOth                       Other interest type loan                1   3.05430      2.51568    1.21     0.2247
OptionARM                       Option ARM loan                          1   -5.62433     0.60714    -9.26    <.0001
InvAgency                       Agency loan                              1   -2.62132     0.62853    -4.17    <.0001
InvGov                          Government loan                          1   -1.24522     5.16321    -0.24    0.8094
InvPortfolio                    Portfolio loan                           1   1.42747      0.57615    2.48     0.0132
Jumbo                           Jumbo loan                               1   -1.63863     0.84149    -1.95    0.0515
ApprovalRateHomePurch_06_07     Home mortgage approval rate (%),         1   -0.01348     0.01913    -0.70    0.4810
                                2006-07
MrtgOrigMedAmt_thou             Median home purchase mortgage            1   0.00497      0.00297    1.67     0.0943
                                amount, 2006-07 avg. ($1,000s)
Unemp                            Unemployment rate, Jan 08               1   -0.41388     0.16720    -2.48    0.0133
Unemp_chg_pct                    Pct change in unemp. rate, Jan-Dec 08   1   0.01896      0.01514    1.25     0.2104
Hpi                             House price index, 2008Q1                1   -0.00045559 0.00400     -0.11    0.9094
Hpi_chg_pct                     Pct change in house price index,         1   -0.20110     0.03693    -5.44    <.0001
                                2008Q1-2008Q4
LTV                             Loan-to-value ratio                      1   -0.03575     0.01199    -2.98    0.0029
LTVnot80                        Dummy for LTV not = 80                   1   -1.91260     0.53453    -3.58    0.0003




                                                                                                     G-8
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



OLS Regression Model of Percentage Reduction in Monthly Mortgage Payment for Loans
Receiving a Modification – NFMC Only, Counseling Level Effects

Analysis of Variance
                       Sum of Mean
Source           DF    Squares Square      F Value Pr > F
Model            33    1226322 37161       131.26   <.0001
Error            8007 2266881 283.11238
Corrected Total 8040 3493203



Root MSE           16.82594 R-Square 0.3511
Dependent Mean 18.61660 Adj R-Sq       0.3484
Coeff Var          90.38141




                                                                                               G-9
        NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
        Preliminary Analysis of Program Effects



Parameter Estimates
                                                                            Parameter     Standard
Variable                        Label                                    DF Estimate      Error       t Value Pr > |t|
Intercept                       Intercept                                1   -12.78549    6.51280     -1.96    0.0497
level_1_intk                    Received Level 1 Counseling              1   18.84744     0.50693     37.18    <.0001
level_2_intk                    Received Level 2 Counseling              1   16.11276     0.66476     24.24    <.0001
level_3_intk                    Received Level 3 Counseling              1   20.36422     0.54213     37.56    <.0001
counseling_hours                Tot Indiv Foreclosure Counseling Hours   1   -0.08756     0.03576     -2.45    0.0143
                                Received
black                           Black borrower                           1   1.27612      0.50295     2.54     0.0112
asian                           Asian/PI borrower                        1   0.31688      1.18836     0.27     0.7897
othrace                         Other race borrower                      1   -0.47636     0.87683     -0.54    0.5870
hispanic                        Hispanic borrower                        1   0.81634      0.56303     1.45     0.1471
income                          Household/family income ($)              1   -0.00001029 0.00000491 -2.10      0.0361
OriginalLoanAmt                 Original Loan Amount                     1   0.00000614   0.00000183 3.36      0.0008
year03                          Loan originated 2003                     1   -0.42518     1.47367     -0.29    0.7730
year04                          Loan originated 2004                     1   1.13881      1.36184     0.84     0.4031
year05                          Loan originated 2005                     1   0.58681      1.25905     0.47     0.6412
year06                          Loan originated 2006                     1   1.22767      1.22922     1.00     0.3180
year07                          Loan originated 2007                     1   3.94754      1.25052     3.16     0.0016
FICOOrg                         FICO/Credit Score – Original             1   0.02839      0.00358     7.94     <.0001
CurrentIntRate                  Current Interest Rate                    1   1.76376      0.15785     11.17    <.0001
MrtGrdBC                        Grade B/C mortgage                       1   8.23225      0.50854     16.19    <.0001
IntTypeARM                      ARM loan                                 1   3.48891      0.51848     6.73     <.0001
IntTypeOth                       Other interest type loan                1   3.16462      2.50883     1.26     0.2072
OptionARM                       Option ARM loan                          1   -5.40179     0.60632     -8.91    <.0001
InvAgency                       Agency loan                              1   -2.52492     0.62738     -4.02    <.0001
InvGov                          Government loan                          1   -1.33033     5.14881     -0.26    0.7961
InvPortfolio                    Portfolio loan                           1   1.46665      0.57465     2.55     0.0107
Jumbo                           Jumbo loan                               1   -1.57141     0.83919     -1.87    0.0612
ApprovalRateHomePurch_06_07     Home mortgage approval rate (%),         1   -0.01741     0.01908     -0.91    0.3618
                                2006-07
MrtgOrigMedAmt_thou             Median home purchase mortgage            1   0.00500      0.00296     1.69     0.0912
                                amount, 2006-07 avg. ($1,000s)
Unemp                            Unemployment rate, Jan 08               1   -0.36423     0.16691     -2.18    0.0291
Unemp_chg_pct                    Pct change in unemp. rate, Jan-Dec 08   1   0.02582      0.01514     1.71     0.0882
Hpi                             House price index, 2008Q1                1   -0.00018332 0.00399      -0.05    0.9634
Hpi_chg_pct                     Pct change in house price index,         1   -0.18848     0.03690     -5.11    <.0001
                                2008Q1-2008Q4


                                                                                                     G-10
      NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
      Preliminary Analysis of Program Effects



Parameter Estimates
                                                                     Parameter     Standard
Variable                      Label                               DF Estimate      Error       t Value Pr > |t|
LTV                           Loan-to-value ratio                 1   -0.03497     0.01195     -2.93    0.0034
LTVnot80                      Dummy for LTV not = 80              1   -1.83760     0.53318     -3.45    0.0006




                                                                                              G-11
NeighborWorks® America National Foreclosure Mitigation Counseling Program Evaluation
Preliminary Analysis of Program Effects

				
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