Borrowers Who Receive Loan Counseling are 60% More Likely to Avoid Foreclosure

In a new study conducted by D.C.-based Urban Institute, loan counseling is responsible avoiding foreclosure in 60% of the participants who seek it. The National Foreclosure Mitigation Counseling program, which was established in late 2007 at the start of the housing crisis, says that there is a significant reduction in foreclosure rate of people who seek counseling as opposed to the control group.

The government has set aside $356 in foreclosure prevention programs, at nonprofits such as Maryland-based HomeFree-USA and D.C.-based Latino Economic Development Corp. and the Greater Washington Urban League. Next year, this counseling budget is expected to be increased by $60 million. Over 730,000 individuals have received counseling through nonprofit programs.

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