Real Estate Market

Housing counseling generates optimism during tough times

by Broderick Perkins

(7/29/2011) Erate Exclusive - Let's hear it again for housing counseling -- or any financial counseling, for that matter.

It can't be said enough.

Housing counseling, a sort of interactive, intensive guide to home ownership, gives consumers the edge, before, when and after they buy a home.

The latest report to extol the virtues of housing counseling comes from the Homeownership Preservation Foundation (HPF), where 71 percent of those calling for counseling expect to remain in their home even though 52 percent of them reported a significant decline in their household income.

"The results of HPF's Homeowner Sentiment Survey underscore an undeniable sense of optimism and financial confidence among individuals who call us for foreclosure prevention counseling," said Colleen Hernandez, HPF's CEO.

HPF is member of the U.S. Department of Urban Affairs' HopeNow Alliance, a group of public, private, for-profit and non-profit agencies aligned to counsel home owners facing foreclosure. HUD-approved help is available from the Homeowner's HOPE Hotline at 888-995-HOPE (4673) or from an alliance member, such as HPF.

The study also found 58 percent of those responding expect their personal financial situation to improve over the next year.

Because counseling often helps homeowners land a mortgage modification or other workout, an expected reduction in mortgage payments (41 percent), a new job (19 percent), or an increase in wages (12 percent) were the most common reasons counseled home owners cited for the anticipated improvement to their personal finances.

The HPF Homeowner Sentiment Survey also found, even though 53 percent of those who have underwater mortgages (the loan is larger than the home's value), and 54 percent have suffered home value depreciation since purchase, 60 percent remain in the home-is-a-good-investment camp. "It's very encouraging that homeownership remains viewed so positively by the majority of Americans in spite of the events of the past 4 years.", said Nancy Osborne, Chief Operating Officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

"Homeownership clearly remains front and center in the American Dream, and we applaud the resilience and determination of distressed homeowners to fend off foreclosure, which many of them are able to do after calling our counselors for reliable information on available assistance programs and for help working with their lenders," said Hernandez.

Still, hard times are hard times. Amid the optimism is some discontent. The study also found:

• Eighty-eight percent of HPF's HOPE Hotline callers support mortgage modification programs, but only 17 percent said that they have seen steady progress with their modification application.

• Of the 14 percent of respondents who felt that their personal financial situation will worsen in the next year, declining wages (25 percent), worsening economic conditions (17 percent), increase in mortgage payment (15 percent), or negative equity on their home (9 percent) were cited as factors most contributing to the pessimism.

• Seventy-six percent said their experience with homeownership has been positive, but only 31 percent said they would buy another home if they moved, 37 percent said they'd rent and 32 percent didn't know what they'd do. Half of would-be buyers said their next home would be less expensive than the first.

• One-quarter of the respondents said having emergency savings is the most important precaution one can take before buying a home, but only 4 percent said their savings was sufficient.

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