May 23, 2019
Foreclosure Crisis Preparedness: Learning from 2008
In response to the beginning of the housing crisis in 2007—when it was recognized that the number of homeowners in the US who were at risk of losing their homes had increased twofold since just the year prior—that December Congress initiated the National Foreclosure Mitigation Counseling (NFMC) program. Its purpose was to assist homeowners in at-risk communities by aiding them in maneuvering through the foreclosure process, and to determine whether other solutions such as getting out of a home that was too expensive or even renegotiating mortgages with their lenders were options. The organization behind the program’s implementation was the Congressionally-chartered nonprofit organization called NeighborWorks America. Together with Urban Institute, this organization recently produced a report examining the takeaways from the eleven years of the program’s operations—which contains potentially valuable information on how to deal with another crisis, should one arise.
One key aspect of the NFMC program’s success was that policymakers reached a fairly quick consensus on what the crisis itself was and how to respond to it. The program was granted an initial appropriations amount of $180 million, $130 million of which was awarded within 60 days, making a swift dent in the emerging crisis; this was only possible because action was taken decisively.
The program was also transparent in how it used its funds and why it made the decisions it made, and was clear in describing program requirements. This transparency resulted in high responsiveness to feedback, because the decision-making was not obscure and problems in the process required quick response in order to (among other things) avoid the program getting egg on its face.
By standardizing foreclosure counseling practices and assisting its counselors to meet the standards set by them via extensive training, the NFMC program improved the professionalism of the sector, ensuring better preparedness in the future.
And by carefully tracking the crisis, the response, and its own effects on the same via robust data-tracking systems, the NFMC was able to show its value and evaluate its own results over time. Part of this was the reporting the NFMC program was required to do concerning client outcomes. This in turn helped the program receive a full nine further rounds of funding from Congress.
This program’s success can serve as a blueprint for crisis response in other sectors of our emergency preparedness.
If you’re shopping around for a home in Florida, Rhode Island or Massachusetts, contact us to see how we can help ensure proper transfer of title and provide title insurance. Topouzis & Associates, P.C., is backed by multiple underwriters, staffed by residential real estate specialists and ready to help you avoid costly delays and streamline your residential transactions.