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

Exhibit 4-8.
Percent of Agencies Receiving Support from Various Types of Organizations
Client
Referrals
Financial Support,
Staff Support, or
in Kind Resources
Products or
Services for
Clients
Other nonprofit housing organizations
80%
22%
34%
Social service agencies
76%
15%
22%
For-profit housing developers
31%
9%
9%
Homeless shelters or other transitional
housing
54%
6%
15%
Faith-based institutions
65%
19%
13%
Legal services agencies
45%
13%
21%
Banking or mortgage institutions
75%
60%
58%
Real estate brokerage companies
60%
21%
19%
Insurance companies
21%
20%
17%
Local government
63%
54%
39%
Utility companies
25%
14%
13%
Local employers
48%
18%
10%
Local business associations
34%
16%
9%
Colleges and universities
27%
16%
8%
Source: Abt Associates survey of HUD-approved counseling agencies.
Note: Based on survey responses of 1,106 agencies.
The range of organizations providing financial, staff, and in-kind support is narrower. Only two types
of organizations—banking or mortgage institutions and local government—provide this type of
support to a majority of counseling agencies. These two types of organizations are also the biggest
sources of products and services for clients. Banking or mortgage institutions provide products or
services for clients for a slight majority of agencies (58 percent), while about two-fifths of agencies
receive these services from local government.
The role of banking and mortgage institutions in supporting housing counseling agencies is
noteworthy. As discussed in Chapter 2, banks began to have a vested interest in the housing
counseling industry in the 1990s in response to amendments to the Community Reinvestment Act.
As discussed further in Chapter 9, the extent to which the lending community should fund housing
counseling activities is a source of much debate in the industry. Some counseling providers argue
that lenders should pay for the benefit of receiving more educated clients who are (presumably) less
likely to default on the mortgage payments. Other providers raise concerns that financial
relationships between lenders and counseling agencies could result in clients being steered to
particular loan products or encouraged to take out a mortgage when they are not ready. In the final
rule for the Housing Counseling program, published in September 2007, HUD clarified that it would
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Chapter 4. Intermediaries and State Housing Finance Agencies