The U.S. Department of Housing and Urban Development (HUD) has released two reports on the impact of HUD-approved housing counseling has for those families who purchase their first homes and those struggling to prevent foreclosure. The agency said the studies suggest counseling is helpful in helping families to keep their homes.
The Pre-Purchase Counseling Outcome Study enrolled 573 individuals seeking pre-purchase counseling services in fall 2009 from 15 HUD-funded counseling agencies across the country. The study found that 35 percent of participants had become homeowners 18 months after seeking pre-purchase counseling, and only one of the purchasers had fallen at least 30 days behind on mortgage payments 12-18 months after receiving pre-purchase counseling services. Over 70 percent of purchasers had a FICO score of 620 or higher, and were reported as having completed counseling by their housing counselor.
The agency’s Foreclosure Counseling Outcome Study involved 824 foreclosure counseling clients. Nearly 70 percent of those counseled obtained a mortgage remedy to retain their home, and 56 percent cured their defaults and became current on their mortgages, but these outcomes were much more common among homeowners in the study who sought counseling before becoming delinquent or in the early stages of delinquency.
About three-quarters of the homeowners who had fallen behind on their payments did so because of a loss of income, and very few had any savings to draw upon to pay missed mortgage payments.
Both the pre-purchase counseling and foreclosure counseling studies enrolled clients in the fall of 2009 and early 2010.
"These two studies underscore the need to continue supporting housing counseling programs across this country, especially during this period when families need these services the most," said Raphael Bostic, HUD’s assistant secretary for policy development and research. "The evidence is clear, with a little investment on the front end, we can go a long way toward improving the chances families will buy a home they can afford and sustain their homes in the long run."
