Housing Expert Forum: What is the role of housing education and counseling in the future housing economy and finance system?

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Thursday, September 6, 2012

Welcome to the BPC Housing Commission expert forum! This forum is intended to foster interactive and substantive discussion about pressing housing issues. Each month contributors from different parts of the housing sector will be invited to respond to a discussion topic.

Guest posts are shared regularly with Housing Commissioners to help inform their work.

Have a pressing question you’d like us to consider? Please leave it in the comments section. We encourage you and our expert bloggers to add comments, contributing to the national dialogue on solutions for the future of the housing sector.

Expert bloggers are not members of the BPC Housing Commission. Any views expressed on this forum do not necessarily represent the views of the Housing Commission, its Co-Chairs, or the Bipartisan Policy Center.


QUESTION: What is the role of housing education and counseling in the future housing economy and finance system?

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As Fiscal Austerity Takes Its Toll on Housing Education Programs, A New Role to Fill

By Kent Watkins

In the past, housing education and counseling would have been considered ‘fluff’, brought out only for purposes of helping in a crisis, such as the past Section 235 homeownership defaults and the present underwater mortgage situation. Even today, the terms ‘waste, fraud, and abuse’ are thrown at such activities for pre-homeownership and even rental functionality. This was true also of housing management, until a HUD task force explained to a skeptical Congress its importance to sustainability of the housing stock it had been subsidizing. In times of fiscal austerity, like gym, art, and music classes in the education sphere, the software of housing tends to get the budget-cutters’ and Inspectors’ General gazes.

Read the full post here.


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Housing Education and Counseling is Critical to Sustainable Homeownership

By Lora McCray

The inability of so many consumers to keep their homes during the foreclosure crisis has had a devastating impact on the housing economy and finance system. A significant lesson we can learn from the crisis is that having educated, well-informed buyers is critical to achieving sustainable homeownership. And sustainable homeownership is key to stabilizing communities and strengthening the economy.

Read the full post here.


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Informed Homebuyers Make Responsible Homeowners

By Eileen Fitzgerald

NeighborWorks America is a strong proponent of homeownership education and counseling. As the current economic crisis demonstrates, objective pre-purchase homeowner education—before shopping for a home or a loan—is the buyer’s best defense against delinquency and foreclosure. It is a critical element of sustainable homeownership—which is a homeownership opportunity that makes sense for a consumer’s current and expected budget and income, family situation and mobility needs. Homeowners receiving upfront homeownership education and counseling learn how to develop a budget, responsibly manage credit, and budget for and handle home maintenance. They also learn how to navigate the complicated home acquisition and financing process so that they can make the best choices for their situations. These homeowners find themselves facing foreclosure with far less frequency than other homeowners.

Read the full post here.


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When the Teacher is First and Foremost a Salesman, What Difference Does the Text Make?

By David A. Smith

If the subprime fiasco taught us nothing else, it showed that all the armature of mandatory disclosure is no protection for anxious people grabbing at what they believe is their only chance at least the lowest rung of the homeownership ladder. Nor are consumers and the economy well served by our current system of ex post facto tort floggings, where financial institutions are punished for being unwitting bulk receivers of fraudulently originated loans.

Read the full post here.


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Housing Counseling: Certain costs, uncertain benefits

By Mark Calabria

One of the sacred cows of consumer financial policy, embraced by both major parties, is that an informed consumer will make better choices, and that those choices will lead to better policy outcomes. This logic, as applied to housing, has driven an ever-increasing amount of federal funding devoted to housing counseling. HUD counseling appropriations increased rather dramatically in 1990s, jumping almost 400% between 1991 and 2001. Funding continued to increase. Some of the largest increases were in the years just preceding the peak of the housing market. In just the fiscal year of 2003, HUD funding for housing counseling doubled from about $20 million to $40 million, later increasing to $50 million in FY 2008.

Read the full post here.


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Proliferation of Personal Finance Tools and Disclosure Transparency Rules Empower Buyers

By Brian Montgomery

Traditional forms of pre-purchase housing counseling are certainly valuable in today’s consumer financial marketplace. For homeowners in default, a good housing counselor can be invaluable and enable families to stay in their homes or at least maneuver a softer landing after experiencing financial distress. Notwithstanding, I imagine the future of housing education and counseling to look very different.

Perhaps due to the five-year housing crisis and its cautionary note on homeownership, I believe more consumers will be further motivated into an era of self-education.

Read the full post here.


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Don't Condemn Future Generations to Repeat History

By Robert J. Cristiano

There is no doubt that a major contributor to the financial meltdown that decimated the housing industry was the introduction of sub-prime mortgages. Less clear is the real culprit responsible. Was the broker who wrote the mortgage application more guilty than the lender who funded the loan? Both earned fees. Was the appraiser guilty of irrational exuberance? Or was it people who took out loans they knew they could not repay? In reality, it was a combination of events compounded by a lack of training, education and understanding by all those involved.

Read the full post here.


Past Forums

July 2012 Housing Expert Forum: Do alternative forms of homeownership, such as shared equity models and rent-to-own programs, present viable alternatives for future homeownership?

June 2012 Housing Expert Forum: What are the best options for the millions of single-family homes that may be left behind by Baby Boomers as they age, many of which are in suburban or exurban communities?

May 2012 Housing Expert Forum: What can we learn from current or previous efforts to link evidence-based outcomes to policy or program development?

April 2012 Housing Expert Forum: What lessons can the U.S. learn from housing programs, policies, or regulatory frameworks in other countries?

March 2012 Housing Expert Forum: How can housing policy be responsive to today’s urgent needs and simultaneously address long-term trends?

February 2012 Housing Expert Forum: What are some of the key characteristics of a healthy housing system? And how can the success of these features be measured?

January 2012 Housing Expert Forum: What should the federal government do to address the inventory of foreclosed properties?

December 2011 Housing Expert Forum: What are the most pressing issues in housing policy today?

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