Independent Research Studies Validate Benefits of Mortgage Counseling

Housing counseling increases the likelihood a homeowner will be granted a loan modification by 200 percent, according to research from the ""Federal Reserve"":http://www.federalreserve.gov.
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The central bank also found that counseled borrowers received more favorable terms on their loan modifications compared to borrowers who go it alone. On average, counseling yields a $110 lower monthly payment and an interest rate that's five basis points lower than that offered un-counseled borrowers.

A separate analysis from the ""Urban Institute"":http://www.urban.org found counseling raises the probability that the loan mod will actually cure a serious delinquency or foreclosure, with 55 percent of loans cured among people who received counseling versus 38 percent for those with no counseling.

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The Institute's research also showed that homeowners who received counseling prior to being granted a loan modification were more likely to remain current on their new loan. Sixty-four percent of loans were still current eight months post-modification among counseled borrowers, compared to 51 percent among borrowers without counseling.

Colleen Hernandez is president and CEO of the ""Homeownership Preservation Foundation"":http://www.995hope.org which offers mortgage counseling via the Homeowner's HOPE Hotline.

She says the studies, which were presented at a regulatory briefing held by the Coalition of HUD Housing Counseling Intermediaries this week, verify the efficacy of mortgage counseling for financially challenged homeowners.

""[N]early three-quarters of those who call our national Homeowner's HOPE Hotline and receive foreclosure prevention assistance from our counselors report back that they are still in their homes a year later,"" Hernandez said.

""Alarmingly, the continued availability of these much-needed services is in jeopardy due to recent federal government budget cuts that removed $88 million for housing counseling programs,"" Hernandez continued. ""We must restore this critical funding to ensure that financially distressed homeowners who desperately need reliable, accurate financial guidance can get it.""