Affordable Housing, Community Development, Reports and Publications

Housing Counseling Effective Means for Foreclosure Prevention


HUD has found that housing counseling is an effective way to prevent foreclosures for homeowners who are vulnerable but motivated.  A new report from the Department of Housing and Urban Development- Foreclosure Counseling Outcome Study, Final Report Housing Counseling Outcome Evaluation -, looked at 824 homeowners who utilized housing counseling services in Fall 2009 and then followed up with the homeowners 6 and 18 months after they received counseling.

As one might expect, a greater percentage of homeowners in the study were non-White or Hispanic than in the general population of U.S homeowners and also had lower incomes than most homeowners.

The study had four major findings:

  1. Foreclosure counseling was more effective for clients if they started the counseling before they became delinquent on their payments.
  2. Clients who had higher credit scores at the time they utilized the counseling services were more likely to be in their homes and current on payments when HUD followed up with them.
  3. Despite the differences in housing outcomes during the follow up, there was no correlation between housing outcomes and reasons for delinquency. The majority of delinquent clients wound up delinquent due to various forms of income loss.
  4. The demographics of the clients were not found to have any correlation to the housing outcomes they experienced as a result of counseling.

To download the study, click here


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