Michael Flynn named HUD's acting general counsel
NACEDA: Community development leaders praise Fannie Mae Homebuyer Counseling required to prevent foreclosuresMortgagePress.comNACEDA, Fannie Mae, foreclosures, counseling, MyCommunityMortgage, National Alliance of Community Economic Development Associations Contact: Jane DeMarines, Cell: (202) 997-8785, [email protected] Kim Hayes, (301) 585-1131, [email protected] With 9,100 foreclosures occurring daily, and four million more projected over the next two years, pre-purchase homebuyer counseling is sorely needed to prevent these catastrophic numbers from rising further. That is why the national organization representing the community development field is applauding the recently announced Fannie Mae pre-purchase borrower education and counseling requirements. First-time homebuyers obtaining a Fannie Mae MyCommunityMortgage now must complete pre-purchase home-buyer education and counseling. Additionally, if the borrower is relying solely on nontraditional credit to qualify for the mortgage loan, regardless of loan product or home-buyer status, they must complete pre-purchase home-buyer education and counseling. "This follows best practices coming from the community economic development field and will undoubtedly reduce the number of foreclosures in the future," said Bernie Mazyck, vice chair of the National Alliance of Community Economic Development Associations (NACEDA) and President/CEO of the South Carolina Association of Community Development Corporations. "NACEDA's members counseling data shows that those who have received counseling have infrequently ended in foreclosure. Ninety percent of CDCs are actively providing foreclosure counseling in low-income neighborhoods." Recent homebuyer data captured by NeighborWorks America corroborates this: 1/5 the delinquency rate of subprime loans (2nd qtr, 2007) 30-day delinquencies: Sub-prime borrowers: 14.5 percent; NeighborWorks borrowers: 3.34 percent. Foreclosure rates (2nd qtr, 2007) Sub-prime 2.45 percent, NeighborWorks 0.56 percent. Fannie Mae's new requirement also states that all education and counseling must be provided by a third party that is independent of the lender and must adhere to the National Industry Standards for Homeownership Education and Counseling. If there is not eligible counseling provider in the borrower's area, telephone counseling may meet Fannie Mae's requirements and online counseling may be provided by mortgage insurance companies. Sound and sustainable homeownership "We hope that other financial institutions will put such requirements on their loans," said NACEDA Executive Director Jane DeMarines. "Every family has the right to affordable housing and a community where their children can thrive. Homebuyer education is a key piece of the puzzle to sound and sustainable homeownership." For more information, visit www.NACEDA.org.