Today, the non-profit credit counseling agency, CredAbility, announced its support of the findings of two HUD studies. The outcome of the studies is a validation of the true value provided by HUD-approved housing counselors.
CredAbility is one of the leaders of the credit counseling and education industry in the US. They currently serve clients in every state in the US, as well as Washington D.C., the US Virgin Islands, Puerto Rico and Guam. They provide services to both Spanish and English speakers.
HUD Study Statistics
Just last week, the US Housing and Urban Development Department, also known as HUD, released the results of the two reports. They were on how the HUD-approved housing counseling impacted first time homeowners and distressed homeowners facing foreclosure. Both studies showed that those that received counseling increased their chances of staying in their homes.
The study focused on both foreclosure counseling and pre-purchase counseling. Those who were enrolled in the counseling services from the fall of 2009 through the early part of 2010 were included. It was found that 35 percent of pre-purchase counseling participants became first time homebuyers within 18 months of enrolling in the program. Of all these buyers, only one became delinquent on the monthly mortgage payments.
The foreclosure counseling studies showed that 70 percent of distressed homeowners who received counseling were able to avoid foreclosure through mortgage remedy solutions. 56 percent were able to catch up on their mortgage payments, becoming current and getting out of their default statuses. CredAbility clients were also included in these studies.
CredAbility’s CEO Phil Baldwin expressed his hope that these statistics will help others understand how valuable HUD-approved housing counselors can be. These services are available 24 hours per day, seven days per week, and are free of charge.
The Homeownership Preservation Foundation, also known as HPF, is a nationwide independent non-profit group. CredAbility is a part of the network of counselor partners in HPF. HPF has reportedly taken over six million calls from homeowners who are distressed and looking for legitimate ways to avoid foreclosure. Many callers are referred to CredAbility for HUD-approved counseling services.
HUD Research Statistics
Although there have been reports of a decrease in the amount of distressed homeowners, many still exist. These homeowner are in desperate need of help in order to save their homes from foreclosure. HUD has confirmed that counseling services have helped these homeowners get loan modifications, reductions in the principle mortgage debt and other services that have helped them get and remain current on their mortgage loans. Below are some of the details on the two HUD studies.
Study on Pre-Purchase Counseling Key Findings
- 35 percent became homeowners within 18 months of starting counseling.
- 72 percent completed their counseling programs.
- 71 percent of those who purchased homes had a 620 FICO score or higher after counseling.
- Only one fell behind over 30 days in their monthly mortgage payments within 12-18 months of counseling.
- 58 percent found homebuyers assistance programs through counseling.
- 58 percent found closing cost and down payment assistance programs, and ways to qualify for specific loan programs through counseling.
Study on Foreclosure Counseling Findings
Through this study, it was discovered that about 75 percent of distressed homeowners fell behind on mortgage payments because of income losses. Very few had enough money saved to keep their payments current. But, a large amount of those counseled were able to get current with their payments and keep their homes out of foreclosure. The outcomes were even greater for those who received counseling before becoming delinquent, or within 1-3 months of becoming delinquent. Here are some of the basic statistics of the report:
- Most attempted to negotiate with their mortgage lenders themselves early on, but were unsuccessful.
- 69 percent obtained remedy for their mortgages with counseling.
- 56 became current on their mortgages through counseling.
- 70 percent of those counseled before being placed in delinquent status were still in their homes after the 18-month follow ups.
- Only 30 percent of those counseled after becoming more than six months behind in mortgage payments were still in their homes after the 18-month follow ups.
Diversity Study Results
Participants of the study were from many different racial and ethnic groups. The diverse group of participants included:
- African Americans – 52 percent
- White Americans – 32 percent
- Hispanic Americans – 19 percent
- Multi-racial or Other Races – 16 percent
- Homebuyers and Homeowners Under 35 Years Old – 51 percent
- Female Homebuyers and Homeowners – 72 percent
- Those with Dependents Under the Age of 18 in the Home – 57 percent
According to the statistics above, it appears that HUD-approved housing counseling has been very beneficial to a diverse group of participants. Counselors have helped many with low-to-moderate incomes get valuable information. This pre-purchase counseling information has helped to prepare many for buying a home, helping them to make good homeownership decisions. These decisions have been key to making homeownership more more obtainable, as well as more maintainable for participants.
Kiesha Joseph is a content marketing geek with a true love for the world of real estate. She believes that real estate is not just an industry. It’s an art that deserves to be treated as such. It’s a complex world that includes many aspects, all of which have a story that needs to be told.