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.
