Troubled homeowners who receive housing counseling are 60 percent more likely to avoid foreclosure and have their mortgage payments lowered significantly than borrowers who navigate the process themselves, according to a study released in 2009.
The study, by the Washington, D.C.-based Urban Institute, examined the effectiveness of the government-funded National Foreclosure Mitigation Counseling program, established in late 2007 to counter growing foreclosure rates. The study compared a group of borrowers who received help through housing counselors with a control group who did not. Clients who saw a housing counselor and received a loan modification from their lenders had their monthly payments reduced on average $454 more than those who did not receive counseling, according to the report. Borrowers already seriously delinquent on their loans were 60 percent more likely to avoid foreclosure after meeting with a counselor than those who didn't, the study said.
Yet, despite the overwhelming success of housing counseling, there is imminent danger that funding at the federal level will be cut. Currently, the Senate-recommended level of $88 million in this year's appropriation cycle is literally on the chopping block. Such a move is not only short-sighted, it takes away families' abilities to live the American Dream.
At Consumer Credit Counseling Service of Buffalo, we urge Congress to fund housing counseling at its recommended level. This funding enables us to offer the "Make Your Move" course, designed for first-time home-buyers or individuals who have not purchased a home recently. The course provides participants the step-by-step information in preparation of homeownership, understanding lending requirements and how to maintain their home once they own it.
Counselors can examine a borrower's entire budget as well as assess the best ways to buy -- or save -- their home. Both rental and ownership situations can be addressed with this program.
Home ownership is a financial goal most families share. It is the largest purchase families are likely to make and one of the most important financial assets they can acquire. Finances aside, it is also an emotional fulfillment, often called the American Dream. In these troubling times, the average homeowner is scared, information is convoluted and families need someone to help them work through these issues. That is what we are here for.
We need to continue providing these critical services that not only help families but help our region as a whole. Don't let these vital services be cut. If you believe in the success of housing counseling, contact your member of Congress to express your support.
Paul C. Atkinson is chief executive officer and president of Consumer Credit Counseling Service of Buffalo.