Housing Counseling Can Help Struggling Borrowers
Many individuals who are in danger of foreclosure simply aren't getting the help they need. Across the country, people are losing their homes and some are not responding to repeated efforts to help them. Not surprisingly, many borrowers are frustrated to the point of despair. Housing counselors may be able to help them.
Research from NeighborWorks America shows that homeowners who received credit counseling were 60 percent more likely to avoid foreclosure than those who weren't counseled. That's good news because it shows that credit counseling can work.
Housing counselors help millions of individuals each year regain their financial footing. These counselors often work for nonprofit organizations and are trained to assist people with their financial needs, which can include helping them better manage their debt and finding solutions if they are in foreclosure or pre-foreclosure.
Freddie Mac has worked with housing counselors for many years. Most recently, Freddie Mac and 13 nonprofit groups with strong reputations within the housing community teamed up to reach those who are overwhelmed by collector calls or discouraged about getting their loan modified to make it more affordable. While we only own a small percentage of seriously delinquent loans across the country, we are always trying new ways to reach out to people and help them get the help they need.
These organizations provide individuals with one-on-one support in person or over the phone. What's great about this initiative is that credit/housing counselors will look at the borrowers' total financial picture – all outstanding debt and credit issues, such as credit card debts or auto loans, that may also be causing financial distress. They walk people through the alternatives to foreclosure, help them navigate through the process, identify deadlines and next steps, and develop a spending plan.
On our behalf, these organizations have sent letters or called borrowers directing them to schedule a free appointment for personalized and confidential sessions with certified housing counselors who can review their situations and available options. We're seeing some signs of success – in the initiative's first three months, our nonprofit partners called 15,000 individuals with offers of help.
Walk-in help centers in Chicago are staffed by Neighborhood Housing Services of Chicago and the Latin United Community Housing Association; in Phoenix by Neighborhood Housing Services of Phoenix and Chicanos Por La Causa; in California by Neighborhood Partnership Housing Services; and in the metropolitan Washington, DC, area by HomeFree-USA.
For help over the telephone, Freddie Mac is working with the National Urban League and its chapters in Broward County, FL, and Hampton Roads, VA; National Council of La Raza and its affiliate network members – Southwest Housing Solutions in Detroit and New Economics for Women in Los Angeles; the Metroplex Economic Development Corporation in Dallas; Korean Churches for Community Development; and Boat People SOS, which works with Vietnamese Americans.
If you are experiencing financial difficulties, please seek help from one of the organizations listed above, or from a free, nonprofit, U.S. Department of Housing and Urban Development (HUD)-certified housing counselor. Ask them to help you with all your debt issues such as your mortgage, credit cards, and auto loans. The time to call is now. Don't hesitate, and don't be ashamed or embarrassed – they are there to help. For more information, visit http://www.freddiemac.com/avoidforeclosure/.
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