When facing difficult financial times, the first step to take is to seek a counseling from a HUD approved, non-profit Housing Counseling agency. During a Housing Counseling session, the counselor can take a comprehensive look at your budget to identify if there are any realistic changes that can be made. Developing the budget is the heart of the counseling process. Housing counselors make sure to involve the client in the process to get their feedback and input when examining the budget. It is important to remember that housing counselors may provide suggestions and recommendations, but the final decision is always left to the homeowner.
Determine Feasible Options
Another benefit of going to a Housing Counseling session is the discussion about determining which financial option to move forward with. Counselors assist in determining which options may be realistic or feasible to each homeowner’s individual situation. The counselor will help the homeowner to understand the various options and assist in obtaining the results. The counselor will always provide an objective point of view and help individuals recognize when options may not be feasible, but will also help them to come up with alternatives to assist them towards their goals. During a housing counseling session, the counselor will also make sure to go through the advantages and disadvantages to each option.
Many times a homeowner facing financial difficulties may be nervous or intimidated to contact their mortgage company. Counselors may assist the homeowner in contacting the Lender or Servicer, which is another benefit of attending a housing counseling session. Housing counselors have a good understanding of which departments of the mortgage company to contact to help expedite the process. During the session, the counselor will also assist the homeowner in knowing which documents to being to gather (i.e. W-2 forms, pay stubs, credit report, etc), as well as information on how to draft a letter of hardship to send to the Lender or Servicer.
In summary, counselors can serve as a very valuable resource to struggling homeowners. Good counselors are patient, knowledgeable, and compassionate. However, good housing counselors are also honest, straightforward, and realistic when counseling. There are many times when homeowners may become upset when a counselor suggests that a home may be unaffordable – counselors are only seeking to help and educate people as to long and short term viability of sustaining the mortgage.
An additional benefit of attending a housing counseling session is that with many agencies, like GreenPath, the sessions are completely free of charge. There are no fees associated with attending a housing counseling session. When looking into other agencies, be cautious of foreclosure rescue scam groups, which are becoming more and more common. If an agency asks for fees up front, make sure to research the company thoroughly before signing any contracts or handing over any money. In addition, be cautious if any agencies ask you to surrender the title to your property. If this occurs, the outcome typically involves the “rescuer” selling the property and then renting the property back to the homeowner at a fee that the homeowner cannot afford - which in some cases will eventually end in eviction. Another common foreclosure rescue scam involves a bait and switch method, where the “rescuer” is offering the option to refinance the home. While they are offering the option to refinance, the “rescuer” has the homeowner sign a deed transferring the ownership of the property to the “rescuer”. Often times a homeowner surrenders the property without realizing it until it is too late.
For more information on housing counseling services go to www.greenpath.com or www.hud.gov.