The housing-crisis-driven high demand for financial counseling services of recent years appears to be on track for further collaborative growth and innovation despite budding and expected economic improvements.
A new sense of awareness is driving industry efforts to provide both basic traditional counseling and original solutions such as the Wall-Street-meets-Main-Street approach taken by the Consumer Advocates Group of Los Angeles.
Even though it specializes in residential and commercial mortgage securitization auditing and restructuring services for direct, correspondent and wholesale lenders, federal banking associations and law firms across the country—this year CAG opened its doors to homeowners, in an effort the firm described as “allowing the public” to obtain its services directly by using mortgage securitization audits “to apply leverage when negotiating with banks.”
CAG said it plans to expand efforts to “more effectively” assist homeowners obtain loan modifications and ensure enforceable loans. It negotiates with lenders on behalf of distressed homeowners who need to reduce monthly expenses so they can avoid foreclosure and ensures the lender, servicer and borrower are engaged in open and effective communication that would help secure an early resolution.
CAG operates as a national compliance management firm. In-house experts address critical regulatory compliance issues and quality control to financial institutions, mortgage bankers, real estate attorneys and lender-servicers.
It also offers consulting services for homeowners providing the evidence and support they need to secure better modification terms, restructure new terms, receive principal or mortgage interest rate reduction, or continued discovery. Objective evidence helps simplify negotiations, CAG executives say, and helps banks and homeowners alike to avoid loan modification setbacks and redefaults. Mortgage audit findings can help move a nonjudicial foreclosure action (currently in 29 states), if necessary, into jurisdiction, which can stop foreclosure, giving borrowers regardless of financial hardship and payment history “the chance for a better position to negotiate new terms or loan settlement.”
CAG is one of many firms whose borrower assistance efforts have affected the marketplace.
Earlier this year RealtyTrac CEO James Saccacio attributed consecutive month-to-month drops in total foreclosure filings, which include notices of default, scheduled auctions and repossessions, to forensic loan audits. These forced lenders and servicers to “hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork,” he said. As evidence, he pointed out that in judicial foreclosure states, ones where courts are involved and where banks are most vulnerable to scrutiny over their foreclosure practices, filings dropped substantially more than in states where courts do not usually participate in foreclosure actions.
In March, the financial literacy month, various financial education initiatives and events were launched across the country to assist those in distress and raise awareness.
The National Foundation for Credit Counseling launched its redesigned Web portal adding new tools that help expedite the online counseling process.
According to Gail Cunningham, a spokesperson for NFCC, the website is updated to make online counseling easy to use for a larger number of people so member agencies can meet the consistently high demand for services.
The new system has a simple structure. Initially it asks users to answer two questions: where they live and what type of counseling they need categorized as credit/debt, housing, or bankruptcy counseling. The consumer has the option to choose a local, regional, or national NFCC member agency that provides the requested type of counseling. Then the consumer provides basic information about their income, assets, debt obligations and spending by filling out a form that is securely transmitted to the selected agency. Thus a trained and certified counselor can review the information before contacting the consumer to begin the one-on-one counseling session.
“The last thing” financially stressed customers need is to get delayed by a complex system, said Cunningham, and the new online counseling system is greatly improved. In addition, consumers can receive counseling both in English and Spanish by phone or in person at local NFCC member agencies.
In Maryland, Bank of America experts volunteered to give guidance “to young people” on how to handle personal funds, budgeting and navigating “varying economic climates.” Citing statistics showing that “the majority of the nation’s adults” lack basic finance and housing finance knowledge, the Leigh Bodden Foundation Inc., United Communities Against Poverty Inc. and Camp Fire USA Patuxent Area Council partnered to organize the seminar in Bowie.
