Adam Constantine on MLK Jr.’s impact on housing equality

During the interview, Constantine explains why the industry needs to focus on evoking intentional change rather than launching lackluster initiatives.

Navigating capacity concerns amidst record-high volumes

High loan volumes continues to loom large in the new year, making the “one-stop-shop” approach to the servicing and lending process even more appealing.

How servicers continue to protect neighborhoods amid COVID

We spoke with MCS CEO Caroline Reaves about self-service technology, the shift to virtual and how servicers can prepare for post-COVID success by improving processes today.

How student loan debt impact homeownership

Student loan expert Catalina Kaiyoorawongs shares her practical and tangible advice for people who feel overwhelmed by their student loan debt.

OpinionMortgage

[PULSE] As servicers deal with 4 million in forbearance, the nonprofit housing counseling industry can play a critical role

A response to former CFPB Director Richard Cordray’s blog series on foreclosures

In former Consumer Financial Protection Bureau Director Richard Cordray’s third installment of his three-part HousingWire blog series, Cordray recalls the challenges and disorganization of the 2008 housing crisis. He calls for vigorous oversight from state officials and government agencies including the CFPB, the Federal Housing Finance Agency, and the Treasury to prevent a repeat of the problems that arose.

Danielle_Samalin_headshot_framework_keep_home
Danielle Samalin
Guest Author

While Cordray is correct that government regulation can help streamline the loss mitigation assistance that will be offered to the 4 million homeowners who are currently in a forbearance, he neglects to take note of the critical role that the nonprofit housing counseling industry played as trusted advisors in the last crisis. 

Efforts from housing counselors included submitting complete packages to address the paperwork pain point, assisting with proactive outreach to help servicers gain trust from consumers and explaining loss mitigation options to homeowners. They also advocated for, supported and added efficiencies to the inefficient loss mitigation process.

According to the Urban Institute, borrowers with counseling in the 2008 crisis were 67% more like to be current after nine months than homeowners without counseling. Having a trusted advisor – for example, an unbiased housing counselor – also made it more likely that an at-risk borrower would respond to loss mitigation efforts.

It is crucial for us to recall these findings right now, as misinformation is already circulating regarding critical items, such as who is or is not eligible for options like forbearance.

Collaboration between servicers, nonprofit housing counseling agencies, and government officials are equally as essential as they were last time. In the 2008 crisis, the nonprofit housing counseling industry advocated for additional critical technology solutions, such as the ability to scan and upload documents rather than faxing, which though may sound simple today, was a complete nightmare in 2008. We must revive the practice of efficiently sharing documents between housing counselors and servicers as soon as possible. 

I am relieved by how quickly the mortgage finance industry has responded to the needs of homeowners during the coronavirus shutdowns and their willingness to modify their approach if need be. However, I have no doubt that housing counseling organizations will be – and should be – called upon again to address this new crisis. I hope the industry remembers what history has taught us so that if a foreclosure crisis of this magnitude does happen again, we are ready to address it immediately.

Leave a comment

Most Popular Articles

Prepare for the rise in mortgage rates

Economists offer their takes on how high mortgage rates will climb, how lenders will respond and what impact this will have on the housing market. HW+ Premium Content

Jan 18, 2021 By

Latest Articles

CoStar and private equity group battle for CoreLogic

Nearly three months after data giant CoreLogic confirmed it was exploring multiple offers of acquisition the company is down to final two bidders.

Jan 22, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please