Housing Expert Forum: Consumer Knowledge and Protection

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 should the federal government’s role be in helping prepare consumers to make financial decisions? How can the housing industry help lead the way for better consumer knowledge and protection?

Education and Counseling Help Many Achieve and Sustain Homeownership

By Joseph Ventrone

“In the real estate world, there was one word that used to be the cardinal rule: location, location, location. That was then, before the Great Recession. This is now, and the new cardinal rule of real estate is information, information, information.”

? Michelle Singletary, The Washington Post, August 7, 2010.

Buying a home can be a complex process. Homeownership education offers many benefits to consumers, including improving financial health and money management skills and reducing loan delinquencies and defaults. The more information homebuyers and homeowners have, the more prepared they will be for these responsibilities.

Read the full post here.

---

Preparing First-time Buyers for the Responsibilities of Homeownership

By Jonathan Reckford

Pre-purchase counseling has been an essential component of Habitat for Humanity’s program for many years. Our curriculum includes the basics of mortgage loan transactions, family budgeting, home maintenance and good neighbor practices. This preparation is a cost effective way to strengthen the abilities of all families to sustain themselves as successful homeowners over the long haul. The low foreclosure rate of Habitat homebuyers, even during the economic challenges of the Great Recession, demonstrates the tremendous value of homeowner education.

Read the full post here.

---

Consumer Financial Education Requires Coordinated Private Response

By Brian Montgomery

President Obama’s Proposed Fiscal Year (FY) 2014 Budget increased funding for housing counseling with $132 million allocated to the Department of Housing and Urban Development (HUD) and NeighborWorks. Housing counseling is a vital step to remedying both the causes and effects of the recent financial crisis of 2007. It is clear that the government has identified consumer financial education as a key policy priority under this Administration as well as under President Bush’s Administration, but there remains an absence of a coordinated private response in the marketplace.

Read the full post here.

---

Meaningful Incentives Will Encourage Housing Education and Counseling

By Eileen Fitzgerald

While pre-purchase education and counseling are critical, we do not believe they should be mandatory. Instead, we encourage lenders, GSEs, state housing finance agencies, USDA, HUD and the Federal Housing Administration to create meaningful incentives such as higher LTV requirements, or other preferred terms or rates for consumers to take advantage of pre-purchase education and counseling that is offered well in advance of mortgage closing.

Read the full post here.

---

Policymakers Must Demand Evidence to Determine Best Education Models

By Angela Antonelli

The federal government has long played a role in financial literacy and education. It also has partnered with state and local governments as well as the nonprofit and private sectors to expand programs and outreach. Each year, the U.S. Government Accountability Office (GAO) identifies categories of federal programs where there is room to reduce fragmentation, overlap and duplication. Financial literacy remains one of the major areas ripe for significant improvement.

Read the full post here.

---

Read the Report

Housing America’s Future: New Directions for National Policy

Past Forums

April 2013: Which of the recommendations in the BPC Housing Commission’s report should receive highest priority?

November 2012: What have we learned from past disaster recovery efforts that could be applied in the way of housing assistance following Hurricane Sandy?

October 2012: What should be the interaction (if any) between state and local policies that impact housing availability and affordability?

September 2012: What statement(s) related to housing?policy, or otherwise?would you want to hear in the presidential debates?

August 2012: What is the role of housing education and counseling in the future housing economy and finance system?

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

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

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

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

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

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

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