National Foreclosure Mitigation Counseling Program Update nw/nfmc December 2008

1. National Foreclosure Mitigation Counseling Program Updatewww.nw.org/nfmcDecember 2008 Grantee Production Congressional Report Training Efforts Counseling Efforts Questions

2. Program Update • As of December 10, 2008: • Training • over 3,000 training scholarships provided • over 4,400 certificates awarded in foreclosure-related courses • over 1,500 e-learning certificates earned in Foreclosure Basics • Counseling • 217,000 homeowners have received 233,000 units of counseling throughout the nation.

3. Program Update Primary Reason for Default(as of Sept 15, 2008)

4. Program Update Loan Type of NFMC Clients(as of Sept 15, 2008) Only 22% of mortgages nationwide are ARMs, while 72% are fixed-rate mortgages

5. Program Update Loan Type of NFMC Clients Compared to Loan Type of All Homeowners(as of Sept 15, 2008) Sources: Mortgage Bankers’ Association National Delinquency Survey, June 2008, and NFMC Program Reported Data

6. Program UpdateLoan Status at Intake(as of Sept 15, 2008) Grantee Production Congressional Report Training Efforts Counseling Efforts Questions

7. Program Update Outcomes(as of Sept 15, 2008) (continued)

8. Program Update Outcomes(as of September 15)

9. Program Update Counseling Challenges(from 1st Quarterly Report) • Communication with Servicers • Servicer responses routinely took from 45 to more than 60 days • Loss mitigation departments understaffed and overworked • Documentation faxed or mailed to servicers was lost repeatedly and counselors had to send documentation multiple times • Counselors were connected to a different representative each time they called who proposed different solutions and requirements • Mortgage Restructurings • Loan modifications, forbearance and principal write-downs offered less than repayment plans • Servicers generally had a limited understanding of PSA requirements which lengthened the time to obtain a decision about borrowers’ options • Refinance plans offered were not affordable to borrowers • Lack of PSA incentives for servicers to refinance mortgages

10. Program Update Counseling Challenges(from 1st Quarterly Report) • Borrower Resources • Lack of borrower follow-through with counselors • Job losses • Rising gas and food prices • Falling housing values leaving borrowers “upside down” • Borrowers obtaining loans that were not affordable in the first place • General lack of knowledge about mortgage products and loan terms. • NFMC Program Reporting • Too much information required on each borrower • Time requirements too great • Difficulty in initial set-up of computerized reporting systems

11. Program Update Successful Counseling Strategies(from 1st Quarterly Report) • Outreach • Reaching borrowers early - before they were 60 days delinquent - increased the likelihood of a successful outcome • Reach out to at-risk homeowners via employers, faith communities, foreclosure fairs, flyers and postcards, door-to-door visits and cable access tv & other press coverage Client Preparation • Require clients to bring all documentation to their first meeting • Set realistic expectations with clients • Conduct group orientations or workshops before one-on-one meetings • Use the Internet to share preliminary information to allow for triage

12. Program Update Successful Counseling Strategies(from 1st Quarterly Report) • Counseling Processes and Services • Have counselors available evenings and weekends or at all times • Requiring clients to create a crisis and/or long-term budget • Contact the servicer with the client present; • Escalate difficult cases to more experienced counselors or legal assistance • Provide rescue funds that will catch client up on their mortgage (Not with NFMC funds) Communication with Servicers • Use HOPE NOW list of loss mitigation department phone numbers • Analyze refinancing plans provided by servicers to ensure borrower feasibility • Follow up with servicer within 24 to 48 hours to ensure they had received electronically-transmitted documents