Using a Partner to Educate Consumers

Many things have changed within the mortgage industry, including lenders’ newly found sense of responsibility to mold the level of education for the next generation of borrowers.
Describing her company’s current and future strategy in dealing with today’s challenging financial times, Georgette Dixon, senior vice president and director of national partnerships for Wells Fargo, said that the solution is education, especially borrower education.
Apparently the housing crisis has redefined the goals of banks, nonprofits and even religious groups.
Earlier in November during a seminar on “The Role of the Church in the 21st Century,” Wells Fargo and the Citizenship Education Fund (an affiliate of the Rev. Jesse Jackson Sr.’s Rainbow PUSH Coalition) announced a partnership that aims to provide financial education training to African-American clergy, parishioners and Wells Fargo customers, starting in 2011.
Dixon described the initiative as an expression of the bank’s focus on long-term economic development and the empowering of minority homebuyers with the knowledge they need to obtain and sustain homeownership.
The One Thousand Churches Connected Save Our Homes Financial Literacy Program marks an unprecedented collaboration between the bank and the civil rights group. Joint resources include Wells Fargo’s free money management program, called Hands On Banking, and its online Smarter Credit Center, which offers counseling related to how to establish credit for the first time, reduce debt, and manage credit in the long term. The initiative will train financial education coordinators in 1,500 churches at six Citizen Education Fund sites nationwide.
Following a somewhat similar strategy, the Department of Housing and Urban Development and the National Association of Realtors recently partnered to launch three how-to videos with guidance for those shopping for a home or a mortgage.
Step-by-step homebuying video guidance may bring more homebuyers to the marketplace and ease homeownership headaches for many Americans and also reduce loan risk for lenders and servicers in the long run.
The videos provide detailed information about the most critical aspects of how to find a home they can afford and shop for a mortgage they can sustain as well as what to expect when they go to closing. The set includes Shopping for Your Home, Shopping for Your Loan and Closing the Deal.
Upon the release of the videos, 2010 NAR president Vicki Cox Golder noted that the partnership made sense because educating consumers about the homebuying process is at the heart of what its members do. Furthermore, education creates the conditions necessary for responsible, sustainable homeownership, Golder said.
To enable a larger number of prospective homebuyers to benefit from this free offer, HUD’s videos are designed to be easily accessible from both HUD and NAR’s websites as well as from HUD’s YouTube channel.
According to Federal Housing Administration commissioner David Stevens, the new videos go a long way toward identifying key aspects of the homebuying process that a consumer should be aware of. HUD’s goal is to make the lending process more transparent, which is why real estate agents who often are the primary point of contact for homebuyers are considered to be in a good position to facilitate buyer education.
“Shopping for Your Home—The Homebuying Process” obviously starts with finding a place a borrower wants to call home. This short video will tells viewers how to assess how much of a home they can afford, working with a real estate agent and what steps to take once they find the home they want to buy. Housing counselors can assist homebuyers and homeowners on issues such as homebuying, fair housing, credit issues, and foreclosure prevention.  
“Shopping for Your Loan” educates borrowers about what steps to take once they have found the home of their dream and want to stop for a mortgage loan. This video aims to help consumers use the good-faith estimate, describing it as a form that spells out the terms of a loan offer and a means of shopping for the best loan for them. It shows consumers how to use the GFE to determine how long an interest rate is available for a particular loan and how to identify key loan terms and costs of a particular loan offer, explaining that HUD suggests consumers shop and compare GFEs from multiple mortgage brokers and/or lenders in order to get the best loan for their situation.   
The “Closing the Deal” video walks consumers through the actual closing process, including how to make sure the loan they were offered closely matches what they encounter at the settlement table. In particular, it walks the viewer through the HUD-1 Settlement Statement and demonstrate ways consumers can compare their actual costs with those reflected on their good-faith estimate.