HUD Housing Counseling National Federation of Community Development Credit Unions Presented by Sarah Gerecke Deputy Assistant Secretary, Office of Housing.

HUD Housing CounselingNational Federation of

Community Development Credit Unions

Presented by Sarah Gerecke

Deputy Assistant Secretary, Office of Housing Counseling

April 4, 2013

Agenda

What is HUD Housing Counseling?

Impact of Housing Counseling

HUD’s Role

How to find agencies in your area

About 2,500 nonprofit agencies nationwide are approved to provide numerous counseling services, including:

What is Housing Counseling ?

• Pre-purchase Education• Reverse Mortgage• Mortgage Delinquency• Financial Management

• Rental Assistance• Homelessness• Applying for Making Home

Affordable Modifications

Many agencies provide more services and programs, including down payment assistance, emergency utility assistance,

job/interview training, daycare, food banks, homeless shelters, or managing low income housing

Goals of Housing Counselors

• Provide unbiased assistance to help clients resolve their housing problems or needs

• Provide education and one-on-one counseling• Design an action plan to address barriers to housing• Help clients to access community resources • Monitor client’s progress in meeting their housing goals• Assist client to work with lenders to resolve mortgage

delinquencies

HUD Office of Housing Counseling“The mission of the Office of Housing Counseling is to help families to obtain,

sustain and retain their homes. We will accomplish this mission through a strong network of HUD-approved housing counseling agencies and counselors.”

• Created by the Dodd-Frank Wall Street Reform and Consumer Protection Act• 67 HUD staff from the HUD Single Family Program Support Division• National office with staff spread across the county from Alaska to Florida

Goals:• To help clients assess their financial situation and achieve their housing goals.• To increase public awareness of HUD’s housing counseling programs.• To increase the knowledge and capacity of HUD’s housing counseling network.• To improve the impact of housing counseling on consumers and neighborhoods

nationwide.

Mortgage Delinquency Counseling 774,132Pre-Purchase Counseling 206,188Rental Counseling 157,458Home Maintenance and Financial Management Counseling 83,659Reverse Mortgage Counseling 53,170Homeless Counseling 21,947Education Workshops (Group Counseling) 361,057Total Clients Served 1,657,611

Impact of Housing Counseling

FY2007 FY2008 FY2009 FY2010 FY2011 FY20120%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Meeting the NeedProportion of Counseling Devoted to Delinquency & Non-

Delinquency CounselingHUD Approved Agencies, 2007 - 2012

Federal Fiscal Year

% o

f Tot

al In

divi

dual

Cou

nsel

ing

Clie

nts

Mortgage Delinquency & De-fault

Pre-Purchase, Rental and other Non-Delinquency Counseling

Impact of Pre-purchase Counseling• A recently released study of the two-year loan performance of over

18,000 pre-purchase counseling clients from the NeighborWorks America network of counseling agencies finds that those counseling clients are one-third less likely to become 90+ days delinquent in the two years since obtaining their loan than those who did not receive pre-purchase counseling (Mayer and Temkin, 2013). This study was controlled for selection bias.

• A Turnham and Jefferson (2012) HUD study analyzed the outcomes of 573 pre-purchase counseling clients 18 months after completing counseling and found that 35 percent of the participants became homeowners, with only 1 person falling 30 days or more behind in their mortgage payments.

• Study by Peter Zorn, Vice President in Freddie Mac’s Models, Mission and Research Division suggest that the overall delinquency rates of borrowers receiving counseling are 15 percent lower than otherwise identical borrowers not receiving counseling.

NeighborWorks® Research on Pre-Purchase Counseling

Data provided in “Pre-Purchase Counseling Impacts on Mortgage Performance: Empirical Analysis of NeighborWorks® America’s Experience “

*All “with NeighborWorks Counseling data” is from NeighborWorks Affiliates, not agencies that received NeighborWorks training

Estimated share of loans that are 90+ days delinquent within 24 months of origination with and without NeighborWorks pre-purchase counseling

Year Loan Originated First-time Homebuyers 2007 2008 2009With NeighborWorks counseling* 4.70% 3.10% 2.00%Without NeighborWorks counseling 6.90% 4.60% 2.90%

Difference -2.20% -1.50% -1.00%% Decline -32.20% -32.70% 33.10%

Repeat Borrowers 2007 2008 2009With NeighborWorks counseling* 6.10% 4.10% 2.60%Without NeighborWorks counseling 9.00% 6.00% 3.90%

Difference -2.80% -1.90% -1.30%% Decline -31.70% -32.40% 32.90%

HUD Office of Housing Counseling“The mission of the Office of Housing Counseling is to help families to obtain,

sustain and retain their homes. We will accomplish this mission through a strong network of HUD-approved housing counseling agencies and counselors.”

• Created by the Dodd-Frank Wall Street Reform and Consumer Protection Act• 67 HUD staff from the HUD Single Family Program Support Division• National office with staff spread across the county from Alaska to Florida

Goals:• To help clients assess their financial situation and achieve their housing goals.• To increase public awareness of HUD’s housing counseling programs.• To increase the knowledge and capacity of HUD’s housing counseling network.• To improve the impact of housing counseling on consumers and neighborhoods

nationwide.

Housing Counseling Agencies seeking HUD approval submit their applications to the Office of Housing Counseling for review.

Applications are reviewed using a checklist on the following major areas:

• Tax exempt nonprofit status• Audited Financials• Experience in counseling

• Facilities• Compliance capacity• Agency Work Plan

Performance Reviews are performed every two to three years and re-evaluate the information provided in their initial application for approval, plus:

• Client Files Reviewed• Updates to work plan or staff• Reported Client numbers

• Survey Letters sent to clients• Grant administration review

Monitoring HUD Agencies

OHC Program Initiatives• Strengthen relations and communication between HUD

and housing counseling network, in order to achieve broader community impact.

• Encourage Housing Finance Agencies, regional and local coalitions to consider options of bonding as intermediary networks

• Increase the visibility of housing counseling to help consumers and strengthen the industry.

• Explore incorporating housing counseling into more public and private rental and mortgage programs, including FHA.

• Solicit comments and best practices from industry partners.

Why Partner With Housing Counseling Agencies?

• Prepare your clients to make sound financial decisions from an unbiased professional counselor experienced in the local housing market

• Receive notifications on new initiatives, scam alerts and other valuable information that comes from nonprofit impartial sources

• Exchange referrals and resources with agencies serving clients typically served by the NFCDCU

Partnership Models• Marketing and outreach• Cross-Referrals• Financial Education to reach housing

goals• Employer-Assisted Housing programs• Participation in Mortgage Lending

programs• Neighborhood Redevelopment

Ways To Partner With Housing Counseling Agencies

Every area has unique needs and existing collaborations to serve the public. HUD Agencies have countless initiatives to meet local needs.

Use HUD’s website to find agencies within your area to make contact

Discuss formal and informal ways you can work with each other

• Refer clients!

• Join task forces, community development roundtables, and meetings, outreach events

• Join agency mailing lists for news

• Ask for agency counselors to present home buyer education as part of financial education courses

Contact counseling agencies by HUD’s interactive voice system by calling

(800) 569-4287to search by zip code

Receives over 2,000 calls daily

Online referrals to approved housing counseling agencies are available on

www.hud.gov directly on the main page

How to Find a HUD approved Agencies

How to Find a HUD approved Agencies

The next screen takes you to a drop down of states to select your

area from, or you can click on states directly on the map

The search results show

agency’s address, contact numbers, email, languages,

provided, and certified services

How to Find a HUD approved Agencies

For More Information

Contact counseling agencies through hud.gov at www.hud.gov/findacounselor

Or call (800) 569-4287to search by zip code

Check out our new iPhone app in the app store (search housing counseling)

For grant information, training and events, counselor resources and to sign up for our listserv.

www.hud.gov/housingcounseling

Questions or comments: [email protected]