Counselors Help Troubled Borrowers
Working with a nonprofit housing counselor makes it substantially less likely that a home owner dealing with a problem mortgage will re-default after getting a loan modification, according to a study by the Urban Institute.

The study found that 36 percent of home owners who received counseling fell back into serious delinquency within eight months of getting help. That may sound high, but it’s a substantial improvement over the 49 percent of re-defaulters who received loan modifications but no counseling.

The study also found that borrowers who worked with housing counselors cut their payments by an average of $267 more per month than troubled home owners who went through the modification process without a counselor.

Source: The Wall Street Journal, Alan Zibel (12/20/2010)