Study: Proper Counseling Can Help People Facing Foreclosure in Tennessee

Seeking professional help when a mortgage crisis arises can be largely beneficial in the short and long term.

People who are struggling to make their mortgage payments in Tennessee have several options at their disposal. According to the Federal Trade Commission, there are a few avenues to explore, such as contacting the lender to try to negotiate new terms or payments. People may also research their eligibility for the Making Home Affordable Modification Program through the federal government, or they can try to request a forbearance or reinstatement

Counseling is a wise option for anyone wishing to prevent foreclosure. A recent study sought to explore how effective counseling is for people facing mortgage loan issues. The results indicate that people in these situations should seek professional guidance.

The study

In 2012, the U.S. Department of Housing and Urban Development published a study that evaluated 824 people who sought counseling for their options regarding preventing foreclosure in 2009. Researchers reviewed the types of services received and looked at how people were doing 18 months afterward.

Among the key findings of the study were the following:

  • Approximately 70 percent of people who participated in counseling before reaching delinquency on payments were current on payments and still living in the home 18 months later.
  • Only 30 percent of people who waited until they were six months or more delinquent were in their homes and current on the loan 18 months later.
  • Of those who used a counselor, 56 percent were able to get current on the loan and 69 percent were able to reach a remedy for their mortgage situation.

These findings point to the importance of reaching out for help as soon as possible when the threat of falling behind on a mortgage appears.

About mortgage crisis counseling

Experts warn that choosing the correct counseling agency is important. An agency that charges up-front fees or makes guarantees about a loan should be avoided. People who are seeking counseling can request help through the Tennessee branch of the U.S. Department of Housing and Urban Development.

The FTC explains that seeking counseling enables clients to have an experienced person alongside them through the process. A counselor who knows how to put a stop to foreclosure can answer questions and teach homeowners how to prioritize debts. The counselor can also coach a homeowner on how to speak with the loan provider in order to obtain a favorable outcome.

Foreclosure is a serious issue, not only because it can displace a family but also because it can do considerable damage to someone's financial future. Anyone who has questions about this issue should consult with an attorney in Tennessee.