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May 30th, 2010

Nonprofit Finds Unemployment Is Main Cause of Defaults

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No big surprise here: the majority of borrowers receiving housing counseling through one nonprofit claim unemployment caused them to default:

Of the homeowners receiving foreclosure counseling through the National Foreclosure Mitigation Counseling (NFMC) program, 58% listed unemployment as the main reason for default.

The amount of borrowers citing reduced or lost income as the reason for default increased steadily over past year, up from 54% in November 2009, 49% in June 2009, 45% in February 2009, and 41% in October 2008. The increases paralleled the national unemployment rate.

As of May 2010, more than 967,000 borrowers received foreclosure counseling from the NFMC program.

Earlier this month, Washington announced the Home Affordable Unemployment Program (HAUP). HAUP – which will begin on July 01, 2010 – is designed to provide relief to unemployed homeowners. HAUP (referred to as “UP”), “offers eligible unemployed borrowers a forbearance plan to temporarily reduce or suspend their mortgage payments.”

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3 Responses to “Nonprofit Finds Unemployment Is Main Cause of Defaults”

  1. Tweets that mention Nonprofit Finds Unemployment Is Main Cause of Defaults | HSH Financial News Blog -- Topsy.com Says: May 30th, 2010 at 9:17 am

    [...] This post was mentioned on Twitter by Nonprofit News, Nonprofit News. Nonprofit News said: #nonprofit Nonprofit Finds Unemployment Is Main Cause of Defaults – HSH Financial Publishers (blog): Nonprofit Fin… http://bit.ly/aUV7SV [...]

  2. Mitch Says: May 31st, 2010 at 7:15 pm

    Throwing everything into the mix, unemployment is the biggest issue in this country. First jobs, then better jobs, is going to tell where this country eventually ends up going financially. Unfortunately, I just don’t see jobs growing all that fast because I can’t see where they’d possibly come from.

  3. Tim Manni Says: June 1st, 2010 at 10:06 am

    Mitch,

    Good hearing from, thanks for commenting.

    “Unfortunately, I just don’t see jobs growing all that fast because I can’t see where they’d possibly come from”: sad but true. Some industries are adding jobs, but not enough of them at nearly not a fast enough pace.

    Thanks,
    Tim

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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