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White Paper: Housing Counseling Needs Assessment

Abstract

HUD has offered housing counseling since 1968. Demand for different types of counseling has been largely cyclical, following trends in housing finance. For example, during the foreclosure crisis that began about 2008, foreclosure mitigation counseling dominated all other kinds of counseling available.

As time passes from the foreclosure crisis, other types of counseling are likely to dominate. Pre-purchase counseling may continue to constitute the largest part of counseling demand, particularly as a record number of banks are loosening underwriting standards which can contribute to a higher risk of default and foreclosures. But changing demographics for homeowners are also likely to play an important role in shaping counseling demand. Many seniors who have retired and are living on fixed incomes may want to investigate the possibility of cashing out some of their equity with reverse-mortgages (Home Equity Conversion Mortgages or HECMs).

Others may have taken advantage of Home Equity Lines of Credit (HELOCs) during the housing price bubble in the middle of the first decade this century. Their ten-year “draw periods”—the period which cash is available fairly, freely and only interest needs be paid—are about to end. Thus, their HELOCs will reset to require regular monthly principal and interest repayments, and they may demand counseling to help them refinance or otherwise avert HELOC and/or first mortgage default.

Through this white paper, we present a closer look at current progress in the housing market and emerging trends in the housing counseling industry. We also describe methods for leveraging capital through public-private partnerships and considerations for econometric evaluations of HECOM and HELOC counseling.

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Interested in Additional Housing Counseling Research from SP Group?

Check out our interactive data visualization of 2016 Department of Housing and Urban Development Housing Counseling Grants by State. Click the image to the right.

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