As federal funds for credit counseling dry up Wells Fargo & Co. is channeling $12.4 million to counsel distressed borrowers, increasing this year's commitment to national and local counseling agencies by 35%.
The move, which according to Wells Fargo aims to sustain counselors' “vital services,” aims to readjust the bank's engagement in the national financial education landscape in a clear example of markets at work.
The bank took an extra measure based on experience that has shown “coaching and counseling can have a dramatic impact” on homeowners and their ability to sustain homeownership and manage their finances, Wells Fargo Mortgage Servicing executive vice president Mary Coffin stated in a company release.
Up by $5.4 million compared to 2010 these additional resources are earmarked for non-profits that assist borrowers with solutions for a variety of financial challenges including mortgage delinquency and foreclosure prevention.
The new $5.4 million commitment includes grants of $250,000 totaling $1.25 million to some of the country's largest organizations: the National Council of La Raza, National Urban League, the National Coalition of Asian Pacific American Community Development, Housing Partnership Network, National Community /Reinvestment Coalition, HomeFree-USA, and the National Foundation for Credit Counseling Inc.
NeighborWorks America will receive $3 million to support train-the-trainer scholarships for local counseling agencies.
The remaining $1.2 million will be used to extend the face-to-face outreach of approved housing counseling agencies.
In previous reports, at least in part, Wells has attributed to an aggressive approach to customer education and counseling first quarter findings that about 93% of its mortgage customers remained current on their loan payments.
The bank's Social Responsibility Group executives said the increase responds to “considerable demand” in times when public funding for credit counseling is becoming scarce, high unemployment persists, and the foreclosure crisis continues to challenges borrowers and lenders alike.
Executives argue that millions of borrowers may be affected by the U.S. Department of Housing and Urban Development's discontinuation of $88 million in grants to housing counselors nationwide in April.
