Housing Counseling Process Evaluation and Design of ... - HUD User

Counseling to Resolve Mortgage Delinquency
The agency survey also asked a few specific questions about agencies’ approaches to providing
mortgage delinquency counseling, including the degree to which counseling is provided over the
phone, in person, or by other methods, the causes of clients’ mortgage delinquencies, and the types of
assistance agencies provide as part of delinquency counseling. The survey findings on each of these
topics are presented in the sections that follow.
Format of Mortgage Delinquency Counseling
HUD’s Housing Counseling Handbook has long stressed a strong preference for conducting
counseling in face-to-face settings. But in part due to the specific needs of clients facing foreclosure
or eviction, the recently published Final Rule for the Housing Counseling Program revised the
program regulations to allow for alternative formats when it is in the best interest of clients to do so. 36
This change in the rule reflects the general consensus that telephone counseling can be an effective
means of reaching out to delinquent homeowners both because of the convenience it offers in being
able to seek assistance from any location and at any time, and because of the anonymity it provides
for an initial contact on a very sensitive issue.
As noted in Chapter 2, since 2006 there has been a sharp rise in the number of homeowners facing
foreclosure and seeking counseling assistance. The increasing demand for mortgage delinquency
counseling has put significant strain on the resources of many agencies to respond to the growing
number of clients seeking their assistance. Among the responses to the crisis that have been
developed by the public and private sector has been the establishment of counseling telephone call
centers that can handle a high volume of clients from all over the country at all hours of the day and
all days of the week. The most prominent of these efforts is through the Hope Now alliance involving
counselors, lenders, and industry organizations. These efforts have undoubtedly made it possible to
reach out to a much larger number of distressed homeowners than would be possible solely with inperson
counseling. There can be challenges, however, in coordinating the activities of the call-centers
and local counseling agencies. Several comments on the agency web survey noted the tendency for
clients referred to local agencies from phone centers to be confused about the resources available to
help them. As one respondent noted:
“There are problems with customer full disclosure and the customer becomes hostile with
local counselors or funders because they aren't receiving funding to save their homes after
being approved by the out of area agencies serving the 800 Help Line. A better explanation
for the local counselors and customers, of the assistance and services provided would
improve the counseling process for customers.” (Community Action Agency in OH)
Exhibit 6-10 presents findings from the agency survey on the distribution of agencies by the share of
mortgage delinquency clients that are primarily counseled by telephone. Only 21 percent of agencies
reported not counseling any delinquency clients by phone, although 25 percent reported counseling
fewer than 10 percent of clients by this means. About a fifth of agencies (21 percent) reported
36
Department of Housing and Urban Development, Housing Counseling Program; Final Rule, 24 CFR Part
214, September 28, 2007.
Chapter 6. Characteristics of Education and Counseling Services 89