Housing Counseling Strategies

1. Housing Counseling Strategies Responding to Industry Changes Strategies for Results Oriented Counseling and Homeownership

2. Know Your Role The real estate and mortgage industries keep changing and potential homeowners are confronted with many choices when buying a home. Counselors act as neutral advisors to help potential homeowners successfully navigate the home buying process.

3. Counselor’s Toolbox Meeting Lender Guidelines Overcoming Fear Budgeting Down Payment Action Plan Credit Debt Credit Scores The Psychology of Money It is Increasingly More Difficult To Prepare Buyer’s to Become Mortgage Ready

4. Meeting the Credit Requirements Yes, there are more homes on the market – some due to foreclosure or financial distress of the owner. Home builders and homeowners are competing with bank foreclosures and investors who are looking to sell

5. Most lenders are requiring that clients have a 620 credit score to get a FHA mortgage loan. This benchmark has recently changed from a middle credit score of 580 to a 620 with most lenders. There might be circumstances out there where a lender will allow a loan below this benchmark if they don’t plan on selling there loans on the secondary market. Managing Credit and Debt Obstacles Helping Clients Overcome the Biggest Barrier to Homeownership

6. With the mortgage benchmark credit score changing constantly, it’s really tough to keep up with what the requirements actually are. As the market changes like the weather, you can only assume your clients have a high enough credit score to even get a mortgage loan. • Meet regularly with your partners to discuss current mortgage requirements. • New Products • Credit Score Requirements • Down Payment Assistance Foster Relationships With Your Local Lenders

7. Facilitate Communication between client/creditors. • Assist with budgeting to reduce debt; follow through with action plans. • Develop good working relationship with lenders and other local resources. • Explore options/alternatives WITH the client. • Encourage patience. Counselors Role in Resolving Credit Issues

8. Before You Attempt to Settle a Debt Check the Statue of Limitations • Oral Contract – You agree to pay money loaned to you by someone • Written Contract – You agree to pay a loan under terms written in a document, which you an you debtor signed. • Promissory Note – Written Contract an example: mortgage loan. • Open ended accounts – These are revolving lines of credit with varying balances. The best example is a credit card account.

9. Unsecured Debts: • Medical bills • Credit Cards • Department Store Credit Cards • Personal Loans • Student Loans • Bounced Checks Debts Which are Good Candidates for Settlement

10. Penalties and extra interest should be your first target. • Time is on your side. • Never look to eager to settle – Never disclose that the client is purchasing a house. • Remind the creditor that the statue of limitations is approaching. • Negotiate the credit rating with the creditor –Get the creditor to list the account as “Paid as Agreed" or “Account Closed – Paid as Agreed” Settling Your Debts

11. This tool allows you to build debt repayment plans for consumers to help them qualify for home loans. The projected interest savings and time to be debt free also serve to motivate consumers to stick to the plan. The PowerPay Analysis Assumes: • No new debt • The total monthly dollar amount being paid on debts remains constant • As each debt is repaid the amount going towards that debt is rolled over on, or added to, the payments going to a remaining debt. PowerPay – Managing Debt

12. Power Payments PowerPay is used to analyze debt payments to Creditors by running four different scenarios in which rollover payments (called Power Payments) are applied according to the following priorities: • Paying off debts with the highest interest rates first • Paying off debts with the lowest balances first • Paying off debts with the shortest term first. • Paying off debts in the sequence they were entered (creditors' sequence number may be changed at any time). Additional payments can be scheduled and incorporated in these four scenarios

13. Help combat Predatory Lending by helping unwary Borrowers review their Loan Documentation and avoid • Unreasonably high interest rates, • Inflated appraisals, • Unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure. Loan Document Review the Housing Counselor’s Role

14. Organize Locally & Identify Supply & Demand Partners • Secure Partners at Local, State and Federal level both Private Sector and Public Sector • Provide a One-Stop Center that serves as the umbrella for all the Partners’ Programs • Know your market (Supply) and your Customer (Demand) • Meet with Partners to provide case review • Know which programs can work with each other • Know when to say “NO” to a potential client • Certify your lenders and realtors to be preferred = TRAINING Going Beyond the Housing Counselor Role Collaborate/Partner

15. Keep Your Head

16. QTIP (Quit Taking it Personally).  Despite your best efforts, not every client can be helped. • Coach your clients.  Although we would like to hold everyone by the hand, there comes a point when the client needs to be responsible for their own case, with our support. • Define a good day.  Even with our many successes, we also fail at times. By defining what makes a good day, such as completing various tasks or assisting a client in a difficult situation, you will know when you have one. Tips for Housing Counselors

17. Tips for Housing Counselors • Appoint someone to keep a cool head.  When you are fully immersed in the challenges facing homeowners, it is hard to know when you have reached your limit. Having someone to remind you can be helpful. • Have weekly solution meetings.  Sharing difficulties with your peers can offer the opportunity for a fresh perspective • Schedule time away from the office.  Although many of you feel like the world will come to an end if you are gone a day, it is in everyone’s best interest if a good work life balance is maintained.

18. Practice time management.  Take some time each morning to schedule your day and prioritize your tasks. We often spend our whole days putting out fires and never get ahead. • Give recognition to your staff.  A kind word can make all the difference in someone’s day. • Remember the goal.  You are helping people facing a crisis. They will remember the difference you have made in their lives forever. • Decide to keep a positive attitude.  This is a daily decision, not a feeling. Tips for Housing Counselors The following stress-reducing tips were developed during a focus group with participants from HUD Intermediaries and State Housing Finance Agencies.

19. "To get maximum results from your efforts, look beyond the outer concerns of what you're doing. Look at why you've chosen to do it." --Ralph Marston Let Your Passion Work For You and Value the Work You Do!!