Freddie Mac Encourages Homebuyers to Utilize Housing Counselors

For first-time homebuyers looking for information or a guide through the complicated buying process, the best option is a conversation with a housing counselor, according to a blog post from Freddie Mac on Monday.
For those buyers who have no idea how to begin the process, might have less-than-perfect credit, might have questions about whether or not they can even afford a home, or concerns about how to avoid being cheated by those deals that seem “to good to be true,” Freddie Mac recommends the best course of action is visiting with a housing counselor.
“Counselors are trained to help in a variety of situations – from giving advice to someone who’s exploring homeownership for the first time, to helping a future homeowner overcome past credit problems (or lack of any credit history at all),” Freddie Mac wrote on its blog. “The U.S. Department of Housing and Urban Development (HUD) maintains a list of approved housing counselors across the country, and these services are offered free of charge.”
Counseling may reduce the risk of a first-time homebuyer becoming seriously delinquent by an average of 29 percent on affordable mortgages that required pre-purchase housing counseling, according to research from Freddie Mac. The study also found that one-on-one counseling, classroom counseling, and home study via the Internet, which are the three most common types of housing counseling, are equally effective.
In order to help buyers achieve successful and sustainable homeownership, Freddie Mac is offering pre-purchase counseling and financial literacy education on its expanded Borrower Help Centers and Network. There are also resources available on housing counseling on Freddie Mac’s new My Home website, just launched last month.

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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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HUD Housing Counseling Website for Training

HUD Office of Housing Counseling Deputy Assistant Secretary Sarah Gerecke announced the launch of HUD‘s Housing Counselor Certification website. This website is an important step to help counselors get ready for the upcoming housing counselor certification examination. The website offers free on-line training and a downloadable study guide covering a broad range of statute topics. There is no PowerPoint presentation. View the Housing Counselor Certification website at: hudhousingcounselors.com. On June 16, 2015 there will also be a live demonstration of the website. 

All the best!

Anthony Mitchell

The Undeniable Benefits of Housing Counseling Are Worth Every Cent

The case for the widespread use of housing counseling in America’s residential housing marketplace is both simple and straightforward: virtually everyone who has a hand in the construction, financing and sale of an American home today is made better by the presence of U.S. Department of Housing and Urban Development (HUD)-certified housing counseling at some point within the process, whether it takes place months before the purchase of a home, or even in the weeks and months after moving day. Pre- and-post purchase housing counseling performed by HUD-certified professionals leads to better-performing loans made to better-qualified borrowers in practically every economic class, and stronger communities with healthier economies and far fewer foreclosures.

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Underwater Atlanta March 17 at the Carter Center

In the aftermath of the foreclosure crisis, metro Atlanta leads the country with 35% of homeowners underwater on their mortgage loans (Haas Institute, 2014).  Housing recovery in the region has been wildly uneven.  The slow rising tide of home prices in affluent neighborhoods has bypassed large portions of metro Atlanta, particularly communities south of I-20 and along portions of the I-85 corridor.

Of the top 10 hardest-hit zip codes in the country for negative equity, nine are located in metro Atlanta. The hardest hit zip code in the country is in Clayton County where  a staggering 76% of homeowners are underwater.  In this Clayton community, 89% of homeowners are African American. The impact of negative equity is even more significant given the fact that home equity accounts for 92% of personal net worth for the typical African-American household.

SAVE THE DATE: On March 17, Piece by Piece will convene its 150+ partner organizations and more to discuss strategies for addressing the negative equity issue. Make plans to join us for a half-day discussion at The Carter Center. MORE | REGISTER

RECOMMENDED READING:
Haas Institute’s “Underwater America”

Full Report | Atlanta Overview | Georgia Overview

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/