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Industry Insights: Borrower Help Centers, Your Source for Clients Ready to Buy…or Not

November 29, 2016

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A fifth-generation renter, John A. had trouble picturing himself as a homeowner. He was a single dad, and he had some credit issues due to health and employment challenges. But John discovered he was a qualified borrower with the help of D&E, A Financial Education and Training Institute, Inc., one of 14 nonprofits from across the country that teams with Freddie Mac to make the dream of homeownership a reality for many borrowers.

Stories like John's highlight the personal and economic benefits – to homeowners, lenders and real estate professionals – of working with a Freddie Mac Borrower Help Center like Atlanta-based D&E, whose name stands for "develop and empower."

Freddie Mac's Borrower Help Centers are nonprofit, HUD-approved housing counseling agencies that promote the financial health of their community. They facilitate communication in the housing network that surrounds homebuyers: lenders, real estate professionals and housing counseling agencies.

Launched during the housing crisis, the Borrower Help Centers initially focused their housing counselors on helping scores of struggling homeowners avoid foreclosure, or assist them in applying for mortgage modifications or other foreclosure alternatives.

In today's improved economy, the focus of Borrower Help Centers has grown to include assisting qualified homebuyers in preparing to buy a home – including those living in underserved communities. For clients who don't have a Borrower Help Center near them, the program offers support by phone through the Freddie Mac Borrower Help Network.

Teaming Up

With the shift towards getting clients on the path to successful homeownership, D&E's President and CEO Carrie Harris points out that lenders and real estate professionals may find a relationship with a Borrower Help Center to be mutually beneficial:

  1. Referring prospective homebuyers. You may be meeting prospective homebuyers who are not currently mortgage-ready. By referring them to a Freddie Mac Borrower Help Center, they'll be assisted not only in achieving homeownership, but also in sustaining it through good financial choices. "Educated, empowered clients will then most likely go back to the lender that referred them to us when they are ready to buy," Harris says.
  2. Getting referrals. Borrower Help Centers assist those actively seeking to become homeowners. Moreover, they proactively help community members recognize that owning a home is an attainable life goal. "Through outreach, we're able to dispel myths about homeownership," says Harris. By partnering with D&E, local lenders and real estate professionals can benefit from outreach efforts that build a higher profile with prospective homebuyers.

A High Calling

How do Borrower Help Center clients achieve mortgage readiness? D&E's services illustrate the multi-faceted approach that these organizations utilize.

Harris's brainchild, D&E opened its doors in 2000 to "transform the lives of overlooked and underserved communities" through financial education, counseling and outreach. Harris's background is in banking, and she says she "encountered many individuals who needed additional educational resources, or didn't have access to traditional banking services." She saw a need much greater than banks addressed, and this ignited a passion and purpose that spawned D&E.

In addition to its focus on affordable housing needs, D&E also provides low-cost banking, workforce development, youth empowerment, senior enrichment and veteran re-entry programs. D&E's Executive Vice President Patrice Duncan sums up their work: "Outreach and education yield economic empowerment."

Before becoming a Freddie Mac Borrower Help Center in 2011, Duncan reports, D&E already was teaching the Freddie Mac CreditSmart® financial education curriculum. After getting to know Freddie Mac staff members at various venues, Harris recalls, "I was impressed with the commitment Freddie Mac made to strengthening communities, and became interested in how we could further expand the partnership."

Like D&E, the other Borrower Help Centers in the Freddie Mac network are committed to providing holistic financial education assistance that goes beyond mortgage issues. "This program has expanded our ability to reach out with education," Harris says.

"As a Borrower Help Center," she adds, "we're better able to help community members make informed decisions as they seek access to credit." Their ultimate objective is to help turn more informed borrowers into prudent, long-term homeowners.

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