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

Outlook for the Counseling Industry
The evolution of the housing counseling industry over the next 5 to 10 years is likely to be strongly
affected by several trends evident today. Among the most prominent of these trends is the surging
demand and unprecedented level of funding for foreclosure prevention counseling, which will likely
result in new agencies entering the counseling field and existing agencies reorienting their services
toward foreclosure prevention counseling and other forms of post-purchase counseling. At the same
time, there may be renewed support for pre-purchase counseling given the widespread view that the
current crisis was brought on in part because too many homebuyers made poorly informed decisions
about how to finance their homes—and whether to buy at all. Financial literacy education and
counseling is also becoming increasingly prevalent as a means of preparing clients to purchase homes
and helping existing homeowners better manage their finances.
Given the aging of the U.S. population, HECM counseling in particular will continue to be a major
growth sector in the housing counseling industry, forcing HUD and agencies to come up with a
solution to current funding constraints. Given the size of the potential market for reverse mortgages
and the vulnerability of some elderly homeowners, the industry will also need to develop a strategy to
ensure that potential borrowers receive counseling—even if they plan to take out a non-FHA reverse
mortgage—to help them avoid any unscrupulous lending practices.
Another demographic trend that is likely to affect the industry is the continued growth of the
immigrant population and the movement of this population to new market areas around the country.
To respond to the needs of this growing population, the counseling industry will have to attract staff
with the necessary language skills and cultural understanding.
In general, the industry is likely to devote substantial resources to grappling with new technology
over the coming decade. In terms of providing counseling services, local agencies will need to learn
to work more effectively with national call centers providing telephone counseling. All providers will
also need to consider whether and how to incorporate the Internet into their counseling, particularly
agencies who serve younger clients at the top of the income range, such as first-time homebuyers.
In many respects, the outlook for the housing counseling industry is likely to hinge to a great extent
on the availability of funding. While the forces spurring demand for counseling are evident, to be
able to meet this demand agencies will need a reliable source of funding commensurate with the
demand. Funding is also needed to provide the training and oversight needed to bring greater
standards to the industry and to develop the technology needed to create more effective methods for
delivering counseling services to diverse populations. While the current crisis in the mortgage market
is drawing greater funding to the industry, in order for there to be a sustained expansion of the quality
and quantity of counseling the funding commitment will also have to be sustained.
Executive Summary xxi