The HUD Housing Counseling Program: “A Valuable Asset to Homeowners and the Lending Industry in the Face of the Current Foreclosure Crisis”

The Department of Housing and Urban Development’s (HUD) Housing Counseling Program has 1,978 of 2,300 total approved housing counseling agencies nationwide providing Loss Mitigation, Mortgage Delinquency and Default counseling services to assist homeowners facing foreclosure.  HUD-approved housing counseling agencies work vigorously to help homeowners remain in their homes.  Program statistics indicate that 96% of the families that receive housing counseling services avoid foreclosure. 

In addition to participating in the HUD Housing Counseling Program, several HUD-approved National Intermediary Housing Counseling Agencies are partners in the HOPE NOW Alliance, established to provide additional assistance to homeowners in the wake of the current foreclosure crisis.  The HOPE NOW Alliance is a collaboration of credit and housing counselors, mortgage servicers, and mortgage market participants formed with the assistance of the US Department of Treasury and HUD.  The HOPE NOW Alliance is working to develop and implement partnerships within the servicing industry and the nonprofit housing counseling community. The goal is to reach out to homeowners at-risk by providing them with counseling and loss mitigation services.  For organizations seeking additional information on the HOPE NOW Alliance please visit www.HOPENOW.com. 

What should homeowners facing foreclosure know about HUD’s Housing Counseling Program?
 
Homeowners facing foreclosure need to understand that help is available. Through the HUD Housing Counseling Program, counselors are prepared to assist homeowners with (1) understanding and analyzing their current mortgage, credit and financial situation; (2) identifying options (3) establishing and maintaining a line of communication with their lender; and (4) developing a plan of resolution.  These services are generally available for free or at minimal cost.  Homeowners can contact a HUD-approved housing agency in their area by calling 1-800-569-4287 or TDD 1-800-877-8339 or visit hud.gov.   

Why is the HUD Housing Counseling Program valuable to lenders with customers facing foreclosure?      

Since foreclosures are costly and detrimental to lenders as well as homeowners, it is imperative that lenders are aware of, and support, any efforts that would prevent “at risk” borrowers from entering foreclosure.  The mortgage delinquency and loss mitigation services offered by HUD-approved housing counseling agencies are designed to help prevent homeowners from losing their homes.  Housing Counseling agencies work closely with lenders while taking a holistic approach to helping homeowners assess their mortgage situation.  Generally foreclosure counseling includes: (1) gathering baseline client information during an intake session; (2) assessing a client’s mortgage situation; (3) helping the client work with the lender to assess loss mitigation options; (4) helping the clients communicate with servicers; (5) assisting clients with submitting loss mitigation packages to servicers; and (6) creating written action plans to help clients avoid foreclosure and future financial crises.  These service methods may vary amongst counseling agencies but are the general core components of foreclosure counseling. These services assist lenders by helping to prevent “at risk” customers from ever reaching foreclosure status.

Additionally, because a large measure of housing counseling agencies are community-based, they are uniquely positioned to perform effective community outreach and to establish genuine levels of trust with their clients.  This relationship of trust is valuable because most often “at risk” borrowers are stressed and have avoided communication with the lenders.  Counselors can leverage this level of trust to help borrowers take advantage of options that may be available to help them avoid foreclosure. 

During the housing counseling process, counselors complete a comprehensive plan that not only helps the client understand the current mortgage situation but gives the client insight into any underlying financial problems.  Often, this insight can help borrowers turn around their current situations and avoid future financial difficulties.