Foreclosure counseling success rates.
Homeowners who use foreclosure counseling services, many of which are free, will have more success when it comes to saving their home than those who do not use counseling. HUD has put together a report known as the Foreclosure Counseling Outcome Study which provides information about who is asking for help, gives examples of services obtained by clients, and provides details on outcomes received. It also provides details on phone based and in person consultations.
Accessing counseling early in the process is critical. For example, the study shows that almost 70 percent of homeowners who seeks foreclosure help from a counseling agency before becoming delinquent on their mortgage were still living in their home after eighteen months. And even better, they were caught up and current with their mortgage after that timeframe as well. So asking for assistance early can lead to up to a 70% success rate. When considering all advice is confidential, and much of it is free, there is almost no downside to reaching out for guidance and assistance from a professional.
Many who seek counseling had tried to contact their bank or mortgage servicer first. They tried to negotiate on their own, but they were unsuccessful for any number of reasons. So that initial contact to their lender actually delayed the process from starting, and just put people further behind the proverbial eight ball.
In general, as indicated above, roughly 69 percent of individuals who seeks counseling from a HUD certified agency were able to obtain a mortgage remedy, and 56 percent were able to become current on their monthly mortgage payment within a very short period of time.
Types of foreclosure counseling
There are two primary methods. The first is in person or face to face. The second is telephone consultations. Both were shown to be very effective, with little difference between the two. However, maybe surprisingly, telephone counseling clients also achieved even stronger outcomes than face to face.
Now there could be many reasons for this. For example, telephone counseling clients tended to have higher household incomes, they were more geographically dispersed than in-person visits, people who called on the phone would tend to have higher savings, and a smaller percentage were minorities.
Whatever the reason why telephone foreclosure counseling clients were more successful at receiving mortgage modifications, more principal reductions, and more likely to be able to save their home and continue to live in it over the long term.
So depending on the clients and their needs, telephone counseling may be just as effective as in-person counseling. It is offered as an option for any individual client who seeks help from a Housing and Urban Development certified agency. Telephone counseling, which has really expanded during the foreclosure crisis, now provides an important alternative resource for families and communities, especially if there is no local office to stop by at.
The study does a great job in revealing that there was no discernible difference in the effectiveness of phone-based counseling versus in-person counseling. As indicated people who ask for help over the phone had more positive housing outcomes.
The Foreclosure Counseling Outcome Study shows that homeowners have two very different, but very effective options when it comes to getting help. The outcome of the two delivery channels of in person or phone counseling provides alternatives to borrowers.
The bottom line is that obtaining counseling is an important consideration than how you receive it. The National Foreclosure Mitigation Counseling program (NFMC) has found that people who seek help will receive a positive impact, and the chance of them being successful will be increased.
The results of this Housing and Urban Development (HUD) study show and confirms dozens of other independent studies and reports. The message is strong and consistent. Those who seek help fully gain the benefit of confidential government approved housing counseling. Much of this is not news to people who are involved in the industry, as housing counselors have learned first-hand over the years that the advice, support, and housing counseling that they provide helps thousands of homeowners avoid foreclosure. It allows tens of thousands of people every year to make better informed financial decisions about homeownership and their financial condition.
The federal government funded HUD organization strongly recommends continuing the expansion of foreclosure counseling services across the nation. However, the study shows the importance of homeowners in reaching out for help and seeking assistance from a certified specialist, and stresses that this needs to be done early. Call a HUD agency for a comprehensive listing of mortgage assistance programs.
Each and every state, county, and the federal government need to do their best to promote the use of many of these free, and confidential credit and housing counseling services, as time after time it is shown that these services may be the may be the most important factor to the success of people using the wide array foreclosure counseling programs.