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

Chapter Nine.
Policy Considerations
In addition to presenting a comprehensive picture of the state of the housing counseling industry as it
currently exists, one of the goals of this study is to assess the key challenges confronting the industry
and the ways HUD can best support the availability of good quality housing counseling of various
types. The counseling agency survey included questions about organizational challenges, the need for
national industry standards, and HUD’s role in the industry, and the interviews with intermediaries
and state housing finance agencies (SHFAs) provided an opportunity to explore these questions in
more detail.
The responses to these questions in the survey and interviews were wide-ranging and varied.
However, there was substantial agreement among counseling agencies, intermediaries, and SHFAs
that the key challenges currently facing the industry are:
• Building capacity to deliver effective foreclosure mitigation counseling and FHA’s Home
Equity Conversion Mortgage (HECM) counseling;
• Developing appropriate industry standards;
• Reaching clients when they can most benefit from counseling; and
• Obtaining sufficient funding to meet client demand for counseling services and to train
staff adequately.
This chapter discusses each of these issues in turn and summarizes the views of agencies,
intermediaries, and SHFAs about the most appropriate role for HUD in supporting the industry. The
chapter concludes with a discussion of how the housing counseling industry is likely to evolve in light
of current trends and challenges in the industry.
Building Capacity for Foreclosure Mitigation Counseling
Foreclosure mitigation counseling (or counseling for resolving or preventing mortgage delinquency as
it is described on HUD’s 9902 form), has experienced tremendous growth in the past year as the
foreclosure crisis has intensified. Between FY 2006 and 2007, the number of clients receiving
foreclosure mitigation counseling increased by 55 percent. 43 Counseling for homeowners on home
maintenance or financial management for homeowners has also grown in the past year, by 22 percent,
reflecting the economic downturn and housing crisis. By contrast, the volume of clients receiving
pre-purchase counseling, rental counseling, and homeless counseling all declined.
The surging demand for foreclosure mitigation counseling has presented a major challenge for the
housing counseling industry. Concerns about how to fund this counseling have been somewhat
alleviated by two FY 2008 Congressional appropriations totaling $360 million through
NeighborWorks® America, but agencies face a major challenge of developing the staff and processes
to handle large volumes of foreclosure mitigation clients within a very short timeframe. (All
43
See Chapter 1 for Exhibits showing trends in client volumes.
Chapter 9. Policy Considerations 141