Fannie Mae to reinstate homebuyer education and counseling MortgagePress.comFannie Mae, counseling, MyCommunityMortgage, Herb Allison, NeighborWorks Center for Homeownership Education and Counseling
Fannie Mae has announced that it will reinstate a requirement
for homeownership counseling and education for first-time
homebuyers obtaining a MyCommunityMortgage loan or a loan that
relies on non-traditional credit to qualify. Effective Jan. 1,
2009, the requirement is geared toward helping borrowers better
assess their options and responsibilities both before and after
they purchase a home.
"High quality counseling provides the first-time homebuyer in
particular with reliable information and the resources necessary to
make the kind of informed decisions that ultimately lead to
sustainable homeownership," said Herb Allison, President and CEO,
Fannie Mae. "In this extraordinary market, we think it is critical
to reinstate this requirement and to work with counseling agencies
and our lender partners to help homeowners succeed."
All required borrower counseling will be provided according to
the National Industry Standards for Homeownership Education and
Counseling, or those of comparable quality as established by other
organizations. The National Industry Standards for Homeownership
Education and Counseling were developed by a national advisory
council of industry stakeholders, including Fannie Mae, and
spearheaded by the NeighborWorks Center for Homeownership Education
and Counseling. Fannie Mae has long promoted and supported the
development of industry-wide standards to ensure high quality and
consistent pre- and post-purchase homebuyer education.
"Too often, homebuyers arrive at the settlement table without a
full understanding of the terms and conditions of their loan or the
overall responsibilities of homeownership. Educated buyers are able
to make better choices to achieve sustainable homeownership," said
Ken Wade, CEO, NeighborWorks. "Now, more than ever, the housing
industry recognizes the need to ensure high quality education, and
counseling is a key step on the path to homeownership, particularly
for new homebuyers. We applaud Fannie Mae for taking this
step."
"Certified housing counselors are experts on the process of
planning for buying a home, and keeping that home once you're
there," said Susan C. Keating, President and CEO, National
Foundation for Credit Counseling, whose 1,630 certified housing
counselors offer pre-purchase counseling in 847 locations across
the country. "We're pleased to be working with Fannie Mae in
supporting the effort to ensure that Americans embarking upon the
long journey to homeownership do so as prepared as possible."
Consumer Credit Counseling Service (CCCS) of Greater Atlanta, a
HUD-certified housing counseling agency, provides pre-purchase
housing counseling for consumers at 18 offices in four Southeastern
states. Prospective homeowners learn about the home-buying process,
as well as the costs involved in the care and maintenance of a
home. "Any person who receives pre-purchase housing counseling
understands the financial obligations involved in homeownership and
learns how to budget their income to pay for all of these
obligations," said Michelle Jones, vice president of counseling for
CCCS of Greater Atlanta.
Fannie Mae will continue to encourage face-to-face education and
counseling, with some flexibility for telephone counseling to
accommodate borrowers who are unable to attend face-to-face
sessions or who do not have an eligible provider in their area. The
counseling curriculum, provided prior to closing by an independent
and certified third party agency or counselor, will cover a variety
of topics including: readiness for homeownership; budgeting and
credit; selecting a home; obtaining a mortgage; and maintaining a
home. In addition, homebuyers will receive a personalized
assessment of their financial position and readiness for
homeownership, and an analysis of their credit history and current
financial situation.
"Housing counseling gives sound mind in the home buying process.
Financial education is essential to making prudent money-making
decisions," said Rev. Elmira Smith-Vincent, President and CEO of
the Flint, Mich.-based Mission of Peace which provides counseling
to individuals and families.
MyCommunityMortgage provides lenders a conforming alternative
for low- and moderate-income borrowers and provides options that
can help lenders serve communities and provide financing options to
teachers, police officers, firefighters, health care workers,
eligible military personnel and people with disabilities.
"At Citi, we believe homeownership plays an important role in
improving people's lives and strengthening communities. For many
people, access to quality first time homeownership counseling is
key to owning and keeping a home," said Sanjiv Das, CEO,
CitiMortgage. "This year, Citi's Office of Financial Education
celebrated the fourth anniversary of our unprecedented 10-year,
$200 million global commitment to Financial Education," he
added.
"An informed homebuyer is an empowered homebuyer and we commend
all efforts to enhance consumer education requirements," said Cara
Heiden, Co-President, Wells Fargo Home Mortgage. "Homeowners
succeed financially only when they fully understand their financial
options and available mortgage options. Wells Fargo has a
long-standing commitment to offering a variety of homebuyer
education opportunities and our experience demonstrates consumers
are less likely to need future assistance if they enter the loan
origination process with a strong knowledge base."
For more information, see announcement 08-25, Homebuyer
Education and Counseling, on efanniemae.com and the "Find a
Counselor" online by clicking here.
For more information, visit www.fanniemae.com.
