Help Arrives for Student Loan Borrowers

We’ve been inspired recently by former British prime minister Tony Blair, who when he first took office described his priorities as “Education, education, education.” He made good on his promise, raising per pupil funding 48%, adding 35,000 teachers, and raising teaching pay 18%.

In this country, we find that education is not always lifting its students higher, but rather saddling them with tremendous debt that siphons off much of the money they make during their early earning years. Some are forecasting a student loan crisis that may rival the recent housing crisis in this country.

This is why we at MK are enthusiastic about, a new initiative sponsored by the Student Loan Alliance.

The site brings together student loan counselors (many of whom are MK counseling clients) to support those whose education left them struggling financially. It offers online loan advice and assistance, and gives practical, actionable options for those in need.

So a tip of the MK hat to this new initiative, which proves that education should lift us up–not drive us down.

Is the Housing Crisis Continuing? “Thinking Makes It So…”

Of interest here at MortgageKeeper is the question, is the housing crisis over, or not? The feeling in our hearts is that the worst is past us. But the Man on the Street says it just ain’t so.

The MacArthur Foundation’s “Housing Matters” survey made headlines this past week with Americans’ pessimistic view of the end of the crisis. Of those surveyed, 58% believe that we are “still in the middle of it” and an additional 19% believe that “the worst is yet to come.”

Then there’s Bloomberg Government’s Senior Finance Analyst Nela Richardson, who says because foreclosures are down, housing prices are up, and Fannie and Freddie are enjoying profits, the housing recovery is underway. But she brings out that until first time homebuyers believe that there’s a recovery, nothing will be changing anytime soon.

Here at MortgageKeeper, our Q1 2013 numbers up 41% over the same time last year. That meant housing counselors and servicing customer service representatives were using our product at never-before-seen levels to find help for struggling homeowners. So, it seems that while housing as a whole is improving, homeowners and potential homeowners are still needing assistance, and thus meeting the “end” of the housing crisis with healthy skepticism.

We are reminded of Shakespeare’s line in Hamlet, “There is nothing either good or bad, but thinking makes it so.” If the overwhelming thought of Americans is that housing is still in decline, we may be headed for a long slow return to normal.

Guest Blog: Homeownership Preservation Foundation’s Josh Fuhrman

One of MortgageKeeper’s long-time clients is the Homeownership Preservation Foundation (HPF)–the folks behind the national Homeowner’s HOPE hotline, 888-995-HOPE. Their counselors have fielded more than 6 million homeowner calls since 2007, and 70% of these callers are still in their homes a year after their call. Amazing results!

They also have their finger on the pulse of the housing crisis, so we recently talked with Josh Fuhrman, HPF’s Senior Vice President, Government and Community Relations. Josh has been in the counseling industry for more than 15 years, and is currently a board member of the Consumer Advisory Council for the Federal Reserve.

HPF is no longer just about the 888.995.HOPE hotline and foreclosure intervention counseling. How have you branched out to help homeowners in other ways?

While we still operate our 24/7 HOPE Hotline for foreclosure prevention counseling, we’re also developing several other exciting initiatives that will extend beyond helping homeowners in crisis and address a greater range of financial issues common among consumers. In conjunction with various lenders, we’ve introduced pre-purchase counseling and education, which helps people better understand the mortgage process before buying a home; we’re also working with several banks on post-modification counseling, which caters to homeowners who have already been approved for a trial loan modification but who now need help managing their other financial obligations to ensure their modification becomes permanent and that they become long-term, sustainable homeowners.

Economists see the housing crisis easing, but conversely MortgageKeeper is seeing an uptick in the need for our services. Is HPF finding this true as well?

2012 was the fifth consecutive year that HPF received over one million calls, and we continue to receive a high volume of calls, upwards of 4,000 daily, from distressed homeowners looking for financial guidance. Unfortunately, foreclosures are still occurring at levels that are three times what they were pre-crisis, and foreclosure activity is actually increasing in several pockets around the country. It was just recently reported that over ten million homeowners are still “underwater” on their mortgages, or owe more on their mortgage than what their home is currently worth. Looking at just those in foreclosure or underwater, we see 14 million Americans who could potentially benefit from HPF’s foreclosure prevention counseling.

What are the main changes you expect to see in the housing market in 2013?

We expect that there will be an increase in foreclosures over the next year due to lenders learning to comply with new standards set in motion by the various servicing regulations. What we want consumers to know is that, even if it is impossible to retain your home, there are alternatives to foreclosure that allow for a graceful exit. These include short sales, in which the bank agrees to sell a home for less than it’s worth, or a deed in lieu, in which a homeowner agrees to give the deed back to the lender. Both of these alternatives have less negative effects on your credit score and give homeowners a chance to prepare for what’s ahead rather than face the anxiety and fear associated with waiting for an eviction notice.

What barriers do you see to relief in the housing market?

There is still a lack of awareness about the positive impact of housing counseling among consumers, as well as a general sense of distrust in the mortgage lending industry. This is an unfortunate combination, because housing counseling is the tool that can once again bring the sense of trust back into the homeownership process. Looking beyond the housing crisis, HPF’s goal is to make sure that housing counseling is always available as an option for homeowners at any stage of the process, whether they are first-time buyers trying to figure out what they can afford or homeowners who fear they may not be able to make their next payment. Having a third-party ally has been proven to help in both of those situations.