For borrowers facing foreclosure, housing counseling agencies have long been known for their ability to provide solid advice on alternatives, rental options, credit repairs and a range of other topics, including reverse mortgages.
A vast number of these agencies are nonprofit organizations and offer their services free of charge. Never has the service and guidance of counseling agencies been more essential than during the past few years. The large volume of consumers who have financial challenges and have sought outside instruction and information has required counseling agencies and professionals to further walk them through this maze of newly available assistance programs.
Investor-sponsored programs as well as the numerous options within the Home Affordable Modification Program including specific programs for Federal Housing Administration and Veteran’s Affairs loan holders, the Principle Reduction Alternative, the Second Lien Modification Program—just to name a few—have become too complex for many consumers to navigate without the assistance of experts.
Counseling agencies remain financially struggling consumers’ primary resource for key advice to prevent foreclosure. Their roles have never been small; counselors have always helped homeowners throughout every stage of the process, from working with them to define their financial objectives to creating spending plans to preparing hardship letters and other paperwork.
Yet, following the financial downturn, these organizations began to take on a variety of additional services. They are now managing REO properties and marketing properties, enabling them to bring even more value and assistance to both homeowners and investors.
Rightfully so, counseling agencies are gaining more widespread recognition throughout the industry for their growing role in improving the REO and short sale industries and positively affecting the housing market.
In addition to property management services, counseling agencies—known for being advocates for the needs of consumers—are also boosting the level of service they provide financially struggling homeowners. Instead of simply advising borrowers on rental options, they are identifying rental properties and even executing temporary lease agreements.
They are helping borrowers not only understand but also work through rent-to-buy scenarios. Counseling agencies are now going beyond just presenting different options to consumers, they are now integral in helping them carry out those alternatives.
Many agencies attribute their ability to expand their scope of services to the use of sophisticated technology platforms that make it possible and affordable for servicers, investors and other involved parties to collaborate throughout a transaction.
Without a system that is compliant and that can facilitate communication, document sharing and e-signatures, these nonprofit organizations would not have the manpower or resources to connect with vendors, investors, consumers and any other participant.
Especially in this new regulatory era, growing their level of service while staying compliant would be a strain to achieve, to say the least. Today, the only way to properly organize, store and track every piece of communication is through the automation of paperwork and processes, which has made the difference for the agencies making a true impact on the industry.
Nothing is like it was five years ago.
The housing industry has undergone, and continues to experience, dramatic changes. Similarly, the counseling agencies across the country have made considerable changes to their services based on the needs of consumers and the market as a whole. They understood that their role must change, and with that comes the need for new systems. Their ability to adapt has been not only impressive, but also an essential component to the rebound of the housing industry and countless consumers.
Sanjeev Dahiwadkar is CEO and founder of IndiSoft.
