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Freddie Mac PMMS: Weaker jobs market leads to lower mortgage rates

National Mortgage Professional
Nov 06, 2008

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.
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