Foreclosure Prevention Counseling

It is not unusual to meet clients for the first time when they are seeking help with foreclosure prevention.  Counselors serve them by isolating the financial causes and helping them create a budget that will lead them to the best course of action.  If the delinquency is caused by being over extended, counselors often refer the client to a credit counseling agency for possible consolidation of their outstanding bills.  After completing a problem analysis and discussion with the mortgagor, the counselor determines whether it is best to create a plan that will allow the client to continue owning the home or one that will shift ownership.  If it is feasible and if the client wishes to preserve ownership, counselors will design a relief measure that is best suited to the circumstances.  This arrangement may include reinstatements or forbearance agreements.  Where there is no hope of the client meeting the arrears payments, counselors advise and assist in pursuing methods of relinquishing the property with the least negative affect on their credit ratings.  These measures include sale of property, assumption of the mortgage or execution of deed-in-lieu (of foreclosure).  Counselors will provide follow-up counseling with the mortgagor until the default is corrected or the mortgagee completes the foreclosure and the client has alternative housing.

Housing counselors also provide outreach through workshops, housing fairs, city events and community meetings.   A major component of their work is education so that families will not fall prey to scams.  A recent article in the Chicago Tribune highlighted mortgage fraud as a white collar crime wave .  In 2004, 17,727 cases of mortgage fraud were reported .  As a result, many individuals have lost their homes or have been stuck with second mortgages that hey never received.  SCH expects to expand its efforts in foreclosure prevention in the coming years.