Housing market needs diverse financial stability

by Steve Randall01 May 2017
Continued sustainability of the growth of the US housing market requires support and encouragement for a diverse mix of potential homebuyers.

The non-profit Homeownership Preservation Foundation says that it has seen a 12 per cent rise in calls to its HOPE Hotline from homeowners who are at least 90 days delinquent on a mortgage payment since the end of 2016.

During the same period, there has been a 7 per cent increase in its clients who have a household income of less than $35,000.
This is a key group that the foundation intends to target this year.

"By helping more diverse consumers become financially stable with financial coaching, from rural areas to small towns to suburbs to major cities, the housing finance and real estate market will continue to recover," said David Berenbaum, HPF's
Chief Executive Officer.

HPF’s latest Community Report reveals that the largest share of its clients in 2016 defaulted due to unemployment (38 per cent). The 45-54 age group (30 per cent of clients) and 55-64 age group (29 per cent) were the most likely to be clients.
The organization has found that financial coaching of clients with a trial mortgage modification has resulted in a 20-25 per cent improvement in clients sustaining their modified mortgages 12 months later.

There was also an improvement in the credit scores of three-quarters of those clients by an average 25 points.

"The country faces significant work to restore the value proposition for the American Dream of homeownership since the financial crisis," Berenbaum said. "With access to HPF's foreclosure prevention counseling, and post mortgage-modification or pre-purchase financial coaching programs, more diverse consumers will access mortgage credit and become successful homeowners."

As part of the foundation’s work with homeowners, it has launched a board game based on the classic ‘Game of Life’ which helps to show homeowners the risks that they may face to their financial stability at key stages of life, and how the organization can help.

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