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Forward on reverse: Educate and link: Jump-start your reverse business with leads

National Mortgage Professional
Jan 04, 2006

Educate your clients about the home buying process Elisa Blackhomebuyer education, resources for first-time homebuyers "The more you know" is the familiar slogan on television public service announcements. Turns out, it holds true in the home buying arena as well. Education courses can dispel home buying myths, teach money management and decrease default rates. In a recent news release, U.S. Department of Housing and Urban Development Secretary Alphonso Jackson stressed the importance of homebuyer education. "The home buying experience can be extremely daunting. An understanding of the basics of the process is the key to easing those concerns and anxieties." A good first-time homebuyer class covers personal finance as well as mortgage issues. GMAC Mortgage recently published survey results gleaned from 1,000 potential homebuyers nationwide. Consumers expressed greater concern about understanding the financing behind the home than finding the actual home itself. Managing debt and finding the right loan were the top two worries listed by potential homebuyers. Increasingly, mortgage professionals are educating their customers about the financial aspects of homeownership, while they find their customers the right loan. Homebuyer education is also the key to decreasing the default rate on home loans. Community Action Services in Provo, Utah has seen a dramatic drop in default rates among homeowners who completed their homebuyer and mortgage counseling program less than half the national average. Real estate professionals in all aspects of the business are recognizing the need for homebuyer education, and creating or sponsoring programs to meet the demand. At Homebuyers University, first-time homebuyers learn about credit, personal finance and predatory lending as well as the purchase of a home. The university is sponsored by the non-profit organization Homebuyers Inc. The positive response from attendees confirms the demand for such classes. "Everyone should go through such a course, not only before buying a house, but before starting out on their own, said one enthusiastic buyer. "I'm signing my kids up." Another said, "I've learned more about personal finance in the last five hours than I have in a lifetime. I didn't know how bad predatory lending was." HUD has recently released five computer modules with titles such as: The ABCs of Home Buying, Easy-to-Understand Mortgage Programs, and 10 Homeownership Facts That Will Save You Thousands. Esther Foundation, another non-profit homeownership program, offers a free online homebuyer education course with HUD certification for $15. More and more mortgage professionals are becoming actively involved with educating their home loan customers. After all, more educated homebuyers means a more stable marketplace. Elisa Black is director of marketing and communications for the Esther Foundation, a Utah-based non-profit organization that works to strengthen communities by helping people become homeowners. She can be reached at (866) 743-7795 or e-mail elisab@esther.ws.
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