Don't Fear Your Mortgage Lender: Benefits to Foreclosure Counseling

NeighborWorks America recently issued a report, prepared by the Urban Institute. This report finds that Foreclosure Counseling, through a NeighborWorks Certified Housing Counselor, can double the chances of a borrower receiving a mortgage modification AND can reduce the likelihood of re-default by 67%. Yes, this is a pretty massive claim. Being a Housing Counselor myself, it all makes sense to me and I will tell you why.

We have all heard the saying “knowledge is power." The first thing any good counselor does is educate the borrower on the foreclosure process and the options available to them.

Counselors will provide borrowers with tips on everything from filling out paperwork to how to talk to their lenders. They will walk through financial tips and put together a realistic budget. This makes it much easier for the borrower to determine what an affordable payment is, in order to avoid falling behind again in the future. And it doesn’t end there; Foreclosure Prevention Housing Counselors have access to a multitude of referrals, in order to provide borrowers with solutions/assistance with all of the struggles that may have caused them to fall behind on their mortgage and end up in our office, i.e. employment, legal and home repair resources.

This foundation of knowledge can empower a borrower who otherwise may have avoided calls from the lender or entered into an unaffordable repayment plan, just to fall behind again six months later. They now have the tools to discuss possible solutions with their lender and find a long-term/sustainable resolution, all the while knowing they have a strong organization (in our case, Twin Cities Habitat for Humanity) standing behind them. 

If you're going through foreclosure, you have options; know that there are Foreclosure Prevention Housing Counselors out there ready to help!

If you are interested in learning more about Twin Cities Habitat's Mortgage Foreclosure Prevention Program, please click here or call us at 612-331-4090 ext. 3.

By Haley Wotzka, NeighborWorks Certified Foreclosure Prevention Counselor, Twin Cities Habitat