Prince William County leaders who considered cutting funding for an 11-year-old program that helps homeowners avoid foreclosure are thrilled they restored the money before the housing crisis unfolded last year.
The $167,000 county contribution to the Prince William County Financial Education Program was on the chopping block as the supervisors eliminated millions of dollars in county spending to avoid a tax increase in the spring.
“Obviously in light of what we’re facing in the mortgage crisis, it looks like a critical decision,” Supervisor Martin Nohe, R-Coles, said Thursday.
As foreclosures climbed by at least tenfold last year to more than 2,000, the program’s clients doubled to 166, keeping at least 100 families out of foreclosure, said Joe Botta, the manager of the Financial Education Program.
The program’s $308,000 budget, funded partly through several grants, helps homeowners stay afloat by working with lenders to sell the property or negotiate newer, affordable terms.
However, the success rate plummeted from 95 percent to 65 percent last year because many residents were approved for homes they couldn’t afford, Botta said.
Many more residents never contacted the program for help.
“The probable No. 1 thing that determines the outcome of keeping the home is affordability,” Botta said. “The person who has a temporary setback — job, sickness — is in a better position” than someone with an overly expensive mortgage.
As supervisors face a $51 million deficit this year, the program’s importance over the last year is likely to shield it from another wave of cuts in county spending.
“This is when [homeowners] need help most,” said Supervisor John Jenkins, D-Neabsco. “In my opinion, we are in a recession, and it’s not getting any better this year.”
At a glance
A look at the Financial Education Program:
» Typical year: 75 clients, 95 percent success rate
» 2007: 166 clients, 65 percent success rate
