Foreclosure Counseling Outcome Study: Final Report Housing Counseling Outcome Evaluation

Abstract

The Foreclosure Counseling Outcome Study provides information on who accesses counseling services when facing challenges in paying their mortgage loan, what services those clients obtain, and identifies the outcomes the clients experienced in the following 18 months (though it cannot assert that the counseling caused the outcomes). A few of the interesting findings from the report are:

Most study participants had tried to contact their servicer when they first fell behind but had not been successful in negotiating with their lenders. With a counselor’s help, 69 percent of counselees obtained a mortgage remedy, and 56 percent were able to become current on their mortgages. Nearly 70 percent of clients who sought counseling before becoming delinquent were in their home and current on their mortgage payments at the 18-month follow-up period, whereas only 30 percent of clients who were 6 or more months behind at the time they entered counseling were in their home and current at follow-up.

Telephone counseling clients tended to have higher incomes, higher savings, were less percentage minority, and more geographically dispersed than in-person counseling clients. Telephone counseling clients also achieved stronger housing outcomes (more mortgage modifications, more balance reductions, and more likely to be in their home and current at follow-up) than in-person counseling clients. This does not constitute proof that telephone counseling is as effective as in-person counseling for any individual client. Nevertheless, it suggests that the expansion of telephone counseling during the foreclosure crisis provided an important alternative resource for individuals and communities — particularly those living in areas without an in-person counseling provider.

Note: This study and its companion, Pre-Purchase Counseling Outcome Study, are part of a series of studies on HUD’s housing counseling program.

Keywords: HUD, Housing, Finance, 2012