National Community Group Receives $180 Million for Mortgage Default Prevention Effort
- Jan 03, 2008
By Erin Brereton, Content ManagerWashington, D.C.–Nonprofit community revitalization organization NeighborWorks America, based in Washington D.C., announced it has been named in the recent FY2008 Consolidated Appropriations Act to administer a $180 million national counseling program to help reduce home mortgage defaults and foreclosures. Under the legislation, NeighborWorks America will provide grants for housing counseling intermediaries approved by the U.S. Department of Housing and Urban Development and to qualifying state housing finance agencies.NeighborWorks also will provide foreclosure counseling training courses.According to the legislation, NeighborWorks America must grant at least $167,800,000 to qualifying organizations that provide mortgage foreclosure mitigation assistance–primarily in areas with high default and foreclosure rates in the subprime housing market. NeighborWorks America will also be able to provide grants to eligible applicants in areas with high concentrations of subprime mortgages that are in danger. NeighborWorks is currently conducting research to identify at-risk areas.”The foreclosure crisis is damaging the lives of families and communities across the country,” says Doug Robinson, NeighborWorks America spokesman. “We expect that the funds recently made available to be distributed to qualified non-profit intermediaries will help tens of thousands of people avoid foreclosure.”NeighborWorks America must award $50 million of the funds within 60 days of the legislation’s enactment and cannot grant more than 15 percent of the total funds–$27 million–directly to the organization’s 200 chartered members. The legislation also requires all private financial institutions to pay market rates for NeighborWorks America training. More than 200 homeownership counselors participated in foreclosure intervention counseling training at a recent NeighborWorks Training Institute in Portland, Ore.NeighborWorks America will provide a bi-annual report about its mortgage default prevention efforts to the House and Senate Committees on Appropriations and to the Senate Banking Committee and House Financial Services Committee. NeighborWorks America–a national nonprofit organization created by Congress to provide financial support, technical assistance and training for community-based revitalization efforts–has assisted nearly 850,000 low- to moderate-income families obtain safe and affordable rental housing. The NeighborWorks network of more than 230 community development organizations, working in 4,400 areas in all 50 states, has generated more than $12.4 billion in community reinvestment.