GA HOME SAFE – New Program

Important HomeSafe Georgia News

On September 28th the Georgia Department of Community Affairs announced the launch of Underwater Georgia, a new HomeSafe initiative specifically targeted to the approximately 150,000 Georgians who owe more than their homes are worth. Homeowners approved through Underwater Georgia can receive a one-time payment of up to $50,000 to reduce the principal balance on their home. In addition to providing information about Underwater Georgia – without doubt the most significant and potentially impactful HomeSafe program modification to date – this document also chronicles other important activity associated with HomeSafe that has occurred since the January 2016 publication of HomeSafe Georgia – Making the Most of a Valuable Resource, which documented and analyzed HomeSafe’s application intake, approval and disbursement history and made recommendations for program modification and expansion.

[1] Information in this section from DCA Memo: New Mortgage Assistance program to Launch September 28th, and Underwater Georgia Mortgage Principal Reduction Aid Communications Toolkit, September 22, 2106.
[2] See Office of the Special Inspector General for the Troubled Asset Relief Program, https://www.sigtarp.gov/Audit%20Engagement%20Memorandums/Engagement_Memo_GA_Hardest_Hit_Fund_Audit.pdf, September 12, 2016.
[3] See Atlanta Journal Constitution, http://politics.blog.ajc.com/2016/09/13/feds-to-audit-foreclosure-aid-program-in-several-atlanta-area-counties/, by Tamar Hallerman, September 13, 2016.
[4] See http://www.housingwire.com/articles/36326-treasury-boosting-hardest-hit-fund-by-2-billion-extends-program-to-2020 (HousingWire, Treasury Boosting Hardest Hit Funds by $2 billion, Ben Lane, February 19, 2016) and See https://www.treasury.gov/press-center/press-releases/Pages/jl0434.aspx (US Treasury, Treasury Announces Allocation of Final $1 Billion Among Hardest Hit Fund States, April 20, 2016).

William H. McFarland
Relationship Manager, Georgia ACT
Project Director, Housing Georgia
404 – 586 -0740 (office)
404-790-6607 (cell)

Georgia Counselors and others

See the below, this is not our first time hearing this call to organize!

We all can recognize that federal funding will not be the growth engine
of housing counseling going forward. A number of states and localities have developed
valuable models for collaboration where housing counseling groups collaborate to develop joint programs, training, and funding sources.
NHRC is launching a series of discussions aimed at encouraging and supporting local collaborative efforts.

Our first will be on Tuesday, October 4 at 4:00 pm ET, 1:00 pm PT. We will feature the experiences and lessons learned from the New York State collaborative efforts, which have leveraged powerful relationships with the state attorney general, legal assistance groups, housing advocates, and others to generate valuable funding, programs, and training for housing counselors throughout the state. We will have discussions with representatives from HomeSmartNY, Empire Justice Center, Center for New York City Neighborhoods and others on how to make collaboration work.

Please register and join us for this important, beginning discussion:
https://attendee.gotowebinar.com/register/2361981151818306564

Also, please feel free to share this invitation with others who you feel will be interested in local collaboration. We are trying to build a list of counselors who are interested in helping build more collaborative efforts.

Bruce


Bruce Dorpalen
National Housing Resource Center
846 N. Broad St.
Philadelphia, PA 19130

http://www.hsgcenter.org
bdorpalen@hsgcenter.org
215 765-0048

A skimmer’s guide to ‘What It’s Worth’

Excerpts from What It’s Worth: Food for Thought (Part 1)

Pam Bailey, NeighborWorks America blogger | 1/3/2016 7:49:00 PM
The Great Recession dramatically demonstrated how extraordinarily vulnerable the majority of Americans are—not just those who already were precarious even before the housing bubble burst, but also so many others who are “keeping it together” on the surface, but are actually in danger of teetering over the edge with an unexpected provocation. Cover of the book, "What It's Worth"

At the level of the individual and family, the consequence of poor financial health is catastrophic. But the collective size of this malaise (70 percent of U.S. households are savings-limited, income-constrained or debt-challenged) should be downright alarming for the nation. Jared Bernstein from the Center on Budget and Policy Priorities writes in the new book, “What’ It’s Worth” that there is “strong evidence that inequality, income stagnation and under-regulated finance interact in ways that have led to bubbles and busts that damage the larger economy.”
That’s one reason why NeighborWorks America has chosen to focus on “creating economic opportunities” in 2016, focusing all four of its Wednesday symposia at its training institutes on different aspects of the theme. It’s also why our CEO Paul Weech contributed a chapter, and why we believe “What It’s Worth” is such an important book to read and share far and wide. (It does for financial capability what we plan to do for community development in our own book, to be released in December.)

Because it is long, and also to whet your appetite, I thought I would share my “CliffsNotes” version of a few of the suggested solutions to various aspects of the financial crisis among America’s communities and families, which will hopefully stimulate discussion and debate (and lead you to puruse the full book for more detail). Note that for purposes of this summary, I focus on those that do not involve federal or state policy changes, or modification in the way financial institutions operate. Below is the first installment, followed by two more!

Findings from the ‘Diaries’

From Jennifer Tescher, Center for Financial Services Innovation, and Rachel Schneider, Center for Financial Services Innovation: “The Real Financial Lives of Americans

Schneider is one of the coordinators of the U.S. Financial Diaries project, which was featured at NeighborWorks’ August training institute on “Building Pathways to Financial Resilience.” She and Tescher offer several key observations that are important for those offering financial education and coaching:

  • Cash flow is as important an indicator as annual income. Households with seemingly sufficient income get into trouble when the timing of their expenses don’t match the inflow of funds. For families participating in the diaries project, about 60 percent of spending spikes were not accompanied by an income spike in the same month. One-quarter of expense spikes occurred when a household’s income was below its median.
  • Access to financial services (facilitating bank accounts as an alternative to payday loans) is important but insufficient.
  • Borrowing and saving are opposite sides of the same coin. What the authors mean by this is that the cheapest possible access to funds is not the sole determinant of why people choose to borrow vs. save, although that is the criterion traditional economists expect them to use. For example, although the use of personal savings is free, they require self-discipline to accumulate and provide the peace of mind that comes with knowing the funds are there. Thus, some people will borrow even when it doesn’t appear to make sense, just to preserve that “security blanket.” In contrast, sometimes people borrow for nonessential purchases, in return for the immediate gratification and the ability to build a credit history—despite the fact that it comes with a fee and the anxiety of a future obligation. The bottom line: When deciding when to borrow or save, people appear to take both the psychological and financial cost into account.
  • Financial progress is complex, unpredictable, and often messy. Practitioners tend to look at household savings balances over time, caution the authors, and are disappointed when they don’t see steady growth. However, looking at point-in-time savings balances or expecting a constant upward trajectory misses the fact that people are indeed saving.

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Making the Mortgage Process Easier…..

The new mortgage disclosure rule will go into effect on October 3rd. This rule is part of the Consumer Financial Protection Bureau’s Know Before You Owe mortgage initiative that will help consumers with the often stressful task of searching for the right mortgage loan. As part of the housing counseling community, you play an important role in helping consumers throughout the home buying process.

Click here to download a toolkit for resources you can use with your clients and suggested social messaging.

The Know Before You Owe mortgage disclosure rule makes it easier to understand these disclosures by:

  • Streamlining four disclosure forms into two – the Loan Estimate and the Closing Disclosure
  • Standardizing the information to obtain Loan Estimates
  • Giving potential borrowers time to review and understand their mortgage terms before signing on the dotted line

Make sure to take the time to review the site and share these resources.

Financial Counseling can make a difference!

A Personal Investment in North Charleston

by Elizabeth Duffrin

One spring morning in 2005, Dorothea Bernique, an accredited financial counselor in South Carolina, was seated across her desk from a well-dressed, middle-aged client, an African American woman who had just come into a sum of money. As Bernique gently questioned the client about her plans for the money, the woman suddenly leaned in and whispered, “Miss Dorothea, what is investing?” Bernique had long been troubled by the lack of financial knowledge among the working poor in the North Charleston area. But the vulnerability in that simple question overwhelmed her. “Someone could have really taken advantage of her,” Bernique says. “I thought, ‘This is it. I need to go all out and do what is in my heart.'”

Increasing HOPE

Within three months, she quit her well-paying job at an insurance company and launched a nonprofit offering free financial workshops to low-income residents. Ten years later, her nonprofit, Increasing HOPE (Helping Others Prosper Economically), offers a “one-stop shop” for financial services to low-income residents in three South Carolina counties. With the firm belief that quality financial education could improve lives, Bernique located her office in North Charleston, the area of greatest need. The City of North Charleston had always been primarily a working class community. When the 1,500 acre Naval Base and Shipyard closed in 1996 taking with it more than 22,000 jobs, the city fell on hard times. Today, almost a quarter of the 100,000 residents live in poverty. An elevated highway divides North Charleston from the more affluent City of Charleston.

For years on her own time, Bernique had offered free financial coaching to low-income workers through a national ministry. She knew the need for financial education was there, but in 2005, the money to support it was not. Bernique appealed to banks and foundations but could not get their attention. “I was told that financial education wasn’t a poverty issue and didn’t relate to it,” she recalls. To get started, she used the FDIC’s online Money Smart curriculum and borrowed space for workshops from nonprofits and churches. She launched a local radio show on personal finances, passed out flyers at community events and networked. “It was a lot of word-of-mouth,” she says, “a whole lot of pounding the pavement.” Within a year, Bernique settled into her own office, hired staff and expanded her financial curriculum. Her workshops drew maids, janitors, hotel clerks, cashiers and waiters as well as higher-income earners who bounced checks. She trained women moving out of transitional housing through the YWCA and new homeowners through Habitat for Humanity.

Changing people’s relationship with money 

Attendees expressed “almost overwhelming appreciation for the information,” she found. In follow-up phone calls, nearly all agreed they had learned how to budget. But sticking to those budgets proved a bigger challenge — less than 30% reported doing so.  It was only after reading a book by a couple of financial psychologists that she hit on a solution. Now, she helps clients uncover their beliefs about money and reflect on the experiences that shaped those ideas and led to financial trouble.  Bernique recalls one woman in her early 20s who realized that her family was in debt because she expected her husband to provide for all her wants, just like her older siblings had when she was a child. A middle-aged man realized that because his own mother could “stretch a dollar until it screamed,” he was unreasonably expecting his own wife to take charge of the family’s money management when he was better suited to the job. Without such insights, “it didn’t matter what we taught them about a budget,” she insists. “We had to change the mindset before we could change the behavior.” The new approach doubled the success rate. More than half of clients reported sticking to their budgets. Budgeting workshops were only one piece of what Bernique envisioned in her one-stop-shop for financial information.

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BestBank Helps Consumers Build Credit While Saving Money…

BestBank offers a unique program to help consumers build credit while saving money. See details from BestBank on their Credit Builder Loan program.

See details below on the Credit Builder Loan program.  Great opportunity for your clients!

What is it?

Credit Builder is a personal loan secured by a certificate of deposit (CD). This positions you to help your credit history by proving that you can reliably pay back a loan on time. Plus, all principal paid, you get to keep as savings.

No money down and no fees.

The best part of Credit Builder is how easy it is to get started. There’s no down payment or fees. You simply make your monthly loan payments on time, and we take care of the rest.

How to get started.

Visit your local branch and talk to a banker!

https://www.bestbank.com/Loans/CreditBuilder.aspx

 

Homebuyer Assistance Programs Well Funded in Georgia….

Georgia is rated among the states with the greatest number of down payment programs, according to new research released from Down Payment Resource.  The states with the greatest number of down payment programs are California, Florida, Texas, Maryland, New York, Georgia, Pennsylvania, Massachusetts, Illinois and Colorado.

Great news for your homeownership counseling clients!

See the full data from Down Payment Resource along with a state-by-state index of programs.

http://downpaymentresource.com/payment-resource-homeownership-program-index-q1-2015-highlights/