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

some through pre-foreclosure or short sales, but 4,384 of 19,033 clients (25 percent) that were not
able to remain in their homes ended up in foreclosure.
The 4,834 clients that ended up in foreclosure account for 4 percent of all clients that completed
counseling in 2007. However, we do not have comparable outcome information for approximately
55,000 of the 136,000 clients (40 percent) who completed counseling and were referred to other
agencies, referred for legal assistance, entered into debt management plans, or declared bankruptcy.
It is not known how many of these clients were able to remain in their homes and how many ended up
in foreclosure.
The fact that outcome information is not available for a substantial share of the clients that completed
mortgage delinquency counseling reflects the difficulties discussed above related to conducting
follow-up with counseling clients, particularly when the amount of counseling provided is low,
making it less likely that the client would develop a strong relationship with the counselor or agency.
As shown in Chapter 6, the average across all agencies was for clients seeking assistance in resolving
a mortgage delinquency to receive 3 hours of counseling, although a quarter of agencies reported
spending 2 hours or less.
Clients Seeking Help Converting Home Equity into Cash or Seeking Better Mortgage Loan
Terms
The HUD 9902 for 2007 combines outcomes for two distinct groups of clients: (1) clients seeking
help converting home equity into cash (HECM counseling) and (2) clients seeking better mortgage
loan terms (mortgage refinance counseling). As a result, interpreting outcomes is more challenging
than for other types of counseling clients. Overall, 54 percent of HECM and mortgage refinance
clients completed their counseling within the year and resolved their issue in some way, 4 percent
were counseled and referred to another agency for help, and 12 percent were still receiving
counseling (Exhibit 7-13). Only 1 percent of clients were known to have withdrawn from counseling;
however, counseling status and outcomes were unknown for 29 percent of clients.
Among the approximately 110,000 clients that completed HECM or mortgage refinance counseling in
2007 and fully or partially resolved their issue, the most common outcome was to obtain a HECM.
About 65,000 clients, or 60 percent of those that completed counseling, took out a HECM. Another
6,000 clients received HECM counseling but decided not to take one out. About the same number of
clients received a home equity or home improvement loan or other home repair assistance, but this
may include mortgage refinance clients as well as HECM clients. Another common outcome, which
probably primarily applies to mortgage refinance counselees, is to have completed financial
management or budget counseling.
Chapter 7. Client Characteristics and Outcomes 113