Since the financial crisis of 2007, housing issues continue to be a hot topic throughout the United States. Although the financial crisis has started to ease in parts of the country, millions of homeowners are still struggling and a growing number of current borrowers are paying more than 50% of their income for housing.
This is troubling because the budgets of many of these borrowers are stretched extremely thin. An unexpected expense, such as an auto repair or medical bill, could cause them to become delinquent on their mortgage.
Several recent studies provide evidence that both pre-purchase homebuyer counseling and foreclosure mitigation counseling can be a step in the right direction in preventing a personal housing crisis.
In May 2012, the U.S. Department of Housing and Urban Development (HUD) released results of a study that found nearly 70% of delinquent homeowners who received counseling obtained a mortgage remedy to retain their home, and 56% cured their defaults and became current on their mortgages. The best outcomes occurred when the counseling was received one to three months after the initial delinquency.
A 2010 National Foreclosure Mitigation Counseling Program study came to similar conclusions. It found that borrowers who had missed a mortgage payment were about 50% more likely to become current on payments when they received housing counseling.
In the counseling arena, nearly 2,700 HUD-approved housing counseling agencies strive to provide consumers with objective housing and financial advice. Some housing counseling agencies are also nonprofit credit counseling organizations that offer holistic assistance with additional financial issues such as credit card debt.
These credit counselors can assist prospective homeowners by assessing their household budgets, evaluating their credit quality, and helping them pay down debt and bring past due bills current.
If a homeowner is struggling to make a mortgage payment, a credit counselor can help the debtor explore government programs, servicer programs, and other options to resolve the mortgage problem. If the homeowner has high credit card debt, the counselor may be able to lower the amount the consumers pays on interest and fees to free up more money for the mortgage payment.
GreenPath provides pre-purchase counseling for people interested in purchasing a home, foreclosure prevention counseling for individuals seeking help with resolving or preventing mortgage delinquency, and reverse mortgage counseling for seniors considering a reverse mortgage.
GreenPath also offers debt counseling to assist consumes with other financial issues.
For more information, call GreenPath’s housing department at (888) 860-4167 or log on to http://www.greenpath.org/how-we-can-help/housing-counseling.htm
Note: This post is sourced from a related topic in Credit Union Magazine, found online in its entirety at: http://www.creditunionmagazine.com/articles/38194-counseling-helps-keep-foreclosures-at-bay