Foreclosure Counseling: Areas of Greatest Need in 2011


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Published: December 1, 2011

Five years into the foreclosure crisis, borrowers across the country are still struggling with their mortgage payments, and are seeking out the help of housing counselors to help them manage their finances and guide them through the loan modification process. Between 2008 and 2011, the National Foreclosure Mitigation Counseling Program assisted nearly 1.2 million homeowners with foreclosure counseling, and provided mortgage-related legal assistance to more than 32,000 homeowners[1]. Below, we provide an analysis of “Areas of Greatest Need,” based on the methodology used in previous rounds of the National Foreclosure Mitigation Counseling Program[2]. The goal of this analysis is to help identify which metropolitan and rural areas have been hardest hit by the foreclosure crisis and remain areas of greatest need for additional foreclosure counseling resources.

Determination of Areas of Greatest Need

The following criteria were used to determine areas of greatest need:

Non-Prime, Owner Occupied Loans

Prime, Owner Occupied Loans

Number of non-prime loans that are 30-90 days delinquent

Number of prime loans that are 30-90 days delinquent

Percent of non-prime loans that are 30-90 days delinquent

Percent of prime loans that are 30-90 days delinquent

Percent of non-prime loans that are in the foreclosure process or REO

Percent of prime loans that are in the foreclosure process or REO

Percent of loans originated between 2004 and 2006 that were higher-priced (subprime)

 

The percent of higher-priced loans comes from the Home Mortgage Disclosure Act (HMDA), and reflect the percent of owner-occupied loans originated between 2004 and 2006 that were higher-priced, a proxy for subprime. Higher-priced loans are defined as those with rates three or more percentage points higher than the comparable Treasury rate.

Data for non-prime loans comes from BlackBox, which covers over 90% of non-agency pools, including jumbo, subprime and Alt-A mortgages. BlackBox coverage of the U.S. market includes nearly 7,600 deals, over 5,700 of which are active.  Loan performance was measured in February of 2011.[3] Data for prime loans comes from Lender Processing Services Analytics Inc. (LPS), which collects loan-level data from servicers. Estimates suggest that LPS has extensive coverage, equal to 66 percent of the first-lien mortgages reported to federal regulators in HMDA data from 2005 through 2008.  Non-prime loans in LPS were removed from the analysis. Loan performance was measured in September of 2011.



[1] National Foreclosure Mitigation Counseling Program (NFMC). Sixth Congressional Report, September 13, 2011. Available online at http://www.nw.org/network/foreclosure/nfmcp/congressional_reports.asp.

[2] For details on the previous methodology, see the National Foreclosure Mitigation Counseling Program (NFMC) website’s details on previous rounds of funding.  The methodology for Round 5 is available online at http://www.nw.org/network/nfmcp/documents/AreasofGreatestNeed_000.pdf.

[3] For more information on BlackBox, see the providers website at http://www.bbxlogic.com/bbx-logic-RMBS-expertise.php