HUD Survey Finds Housing Counseling Works, Phone Sessions Included

Americans who receive housing counseling in order to resolve foreclosure struggles were successful in 69% of cases including 56% of counselees who were able to become current on their mortgages, says a Department of Housing and Urban Development report released in May.

The study did not detail reverse mortgage borrowers specifically, but presented several findings about telephone counseling versus in-person counseling. Phone counseling clients tended to have higher incomes, higher savings, were less percentage minority and were more geographically dispersed, HUD reports. They also received “stronger housing outcomes” than in-person clients seeking foreclosure assistance. 

“This does not constitute proof that telephone counseling is as effective as in-person counseling for any individual client,” the report states. “Nevertheless, it suggests that the expansion of telephone counseling during the foreclosure crisis provided an important alternative resource for individuals and communities—particularly those living in areas without an in-person counseling provider.”

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Additionally, phone clients were older and likely to be married, the survey found. 

HUD says it uses the information collected in its surveys to improve the counseling process overall. 

View the report

Written by Elizabeth Ecker

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  • Some of the data reported looked highly suspect.  To read the percentage of the sample loan types was eye opening.  Over three-fourths of those surveyed had fixed rate loans already which had an average rate close to prime at the time of their origination.  

    From Page xv of the report:  “We obtained mortgage data for 52 percent of the counselees in the study. The mortgage data were recorded by counselors using the information available to the counselor at the time, which could be loan documents or verbal reporting by the client. Of the counselees for whom we obtained mortgage data, 78 percent had fixed-rate mortgages, 13 percent had adjustable-rate mortgages (ARMs), 8 percent had interest-only mortgages, and 1 percent had some other type of mortgage. Most counselees  with fixed-rate mortgages obtained loans at interest rates that were in line with prime market rates.  Although the sample size is very small, counselees with ARMs appear generally to have obtained ARMs at interest rates that were higher than the national average for prime mortgages in those years.

    So the question becomes were those who were helped those who had the least financial difficulties within the vast group of those who have defaulted?  I wish I had more time to devote to determining why the characteristics of the counselees look so skewed.   

  • Some of the data reported looked highly suspect.  To read the percentage of the sample loan types was eye opening.  Over three-fourths of those surveyed had fixed rate loans already which had an average rate close to prime at the time of their origination.  

    From Page xv of the report:  “We obtained mortgage data for 52 percent of the counselees in the study. The mortgage data were recorded by counselors using the information available to the counselor at the time, which could be loan documents or verbal reporting by the client. Of the counselees for whom we obtained mortgage data, 78 percent had fixed-rate mortgages, 13 percent had adjustable-rate mortgages (ARMs), 8 percent had interest-only mortgages, and 1 percent had some other type of mortgage. Most counselees  with fixed-rate mortgages obtained loans at interest rates that were in line with prime market rates.  Although the sample size is very small, counselees with ARMs appear generally to have obtained ARMs at interest rates that were higher than the national average for prime mortgages in those years.

    So the question becomes were those who were helped those who had the least financial difficulties within the vast group of those who have defaulted?  I wish I had more time to devote to determining why the characteristics of the counselees look so skewed.   

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