Unconventional allies: Finding common cause with workers on the ‘front lines’ of communities

By Eileen Fitzgerald
Chief Executive Officer
NeighborWorks America

A woman with diabetes, evicted from her home after failing to keep up with her mortgage, is forced to find shelter with a string of friends. Unable to keep track of her medications or maintain a stable, healthy diet, her disease spirals out of control.

A youth’s grades plummet and he drops out of high school, unable to concentrate on his homework because he shares the same cramped living quarters with five siblings, his parents and grandparents.

An employee of a small business is chronically late and misses key deadlines because she cannot afford to live close to work or secure reliable transportation.


It’s true: Home matters. The lack of safe, clean, affordable housing concerns a wide network of frontline workers in the community. Talk to health care professionals, teachers and business managers, and the critical necessity of decent, accessible housing for health and productivity immediately becomes apparent.

Forty years of research show that reducing overcrowding, for example, lessens exposure to infectious diseases and promotes better health overall. One recent study by the University of Michigan illustrates that housing instability triggers depression and anxiety.

Likewise, teachers testify that children who live in safe, healthy, permanent homes do better in school. National Housing Conference research documents that children who move frequently are absent more from school, have trouble concentrating on their studies, and have difficulty making and keeping friends. In addition, children who live in overcrowded homes have lower math and reading scores, and are less likely to graduate from high school.

In the work world, managers at enterprises both big and small have learned firsthand that employees who are not stressed every month about how they will make their rent or mortgage payments—and ideally do not have arduous or expensive commutes—are more reliable and productive.

By remembering that safe, affordable housing affects virtually every aspect of a person’s life, the number and type of potential partnerships ripe for exploration expands exponentially.

This is re-posted from the Bipartisan Beat blog on the Bipartisan Policy Commission website.

Powerful Benefits Linked to Pre-Purchase Housing Counseling

This is reposted from the Bipartisan Beat blog on the Bipartisan Policy Commission (BPC) website.

Counseling can help families decide whether they are prepared for the obligations of homeownership

By Christopher S. Bond

The BPC Housing Commission believes that counseling and education must be a central part of a more responsible approach to homeownership, particularly for first-time buyers.

I first learned about the benefits of housing counseling from NeighborWorks America, one of our country’s leading community development organizations. In 2007, then-Senator Dodd and I sponsored legislation supporting NeighborWorks’ efforts to help forestall foreclosure for struggling families.

When homeowners experience an unexpected setback – the loss of a job, a medical emergency, or some other crisis – housing counselors can help them find solutions before they fall behind on their mortgage payments. But the benefits of counseling are often felt even before the home purchase takes place, as counseling can help families decide whether they are prepared for the financial and other obligations of homeownership. In meetings with counselors, civic officials, and families, I heard time and time again that pre-purchase counseling’s most important contribution may be helping prospective buyers understand when it is not the right time for them to buy a home.

The latest proof that pre-purchase counseling can offer powerful benefits comes from a recent NeighborWorks study examining 75,000 mortgages originated over a two-year period from October 2007 to September 2009. The study concludes that mortgage borrowers who participated in NeighborWorks’ pre-purchase counseling program were nearly one-third less likely to be 90 days or more delinquent on payments in the first two years after closing than those borrowers who did not receive counseling. This percentage reduction in mortgage delinquencies was the same for both first-time and repeat buyers.

Pre-purchase counseling provided by the NeighborWorks network of organizations consists of a minimum of eight hours of group education and individual counseling sessions. These sessions examine the potential homebuyer's personal and financial situation; details about house selection, the financing process, and the closing; and post-purchase concerns like home maintenance.

Also, the NeighborWorks study responds to one of the main challenges in evaluating the effectiveness of pre-purchase counseling: selection bias. The concern is that people who enter counseling may have certain “unobserved” characteristics related to how they manage credit that can affect mortgage performance, either positively or negatively. To mitigate the impact of selection bias, the study utilized data about borrowers’ credit practices and behaviors from the credit-rating agency Experian and employed a procedure called “propensity scoring” to create a comparison group with the same observable characteristics as the counseling clients.

The NeighborWorks study makes a significant contribution to the public’s understanding of the potential effectiveness of pre-purchase counseling. It’s good to see that the study is receiving some national attention, and it is a must-read for housing practitioners and policy makers.

Former Governor and Senator Christopher S. "Kit" Bond serves as a co-chair of BPC's Housing Commission.

Housing Education, Counseling and the Future of the Housing Economy

This thought piece was originally published September 6, 2012 on the Bipartisan Policy Center's website. The question was: What is the role of housing education and counseling in the future housing economy and finance system?

By Eileen Fitzgerald
Chief Executive Officer
NeighborWorks America

NeighborWorks America is a strong proponent of homeownership education and counseling. As the current economic crisis demonstrates, objective pre-purchase homeowner education — before shopping for a home or a loan — is the buyer’s best defense against delinquency and foreclosure. It is a critical element of sustainable homeownership — which is a homeownership opportunity that makes sense for a consumer’s current and expected budget and income, family situation and mobility needs. Homeowners receiving upfront homeownership education and counseling learn how to develop a budget, responsibly manage credit, and budget for and handle home maintenance. They also learn how to navigate the complicated home acquisition and financing process so that they can make the best choices for their situations. These homeowners find themselves facing foreclosure with far less frequency than other homeowners.

We encourage lenders, government sponsored enterprises, state housing finance agencies, USDA, VA and FHA to create meaningful incentives, such as higher loan-to-value requirements, or other preferred terms or rates for consumers to take advantage of pre-purchase education and counseling well in advance of applying for a mortgage. We also strongly urge these entities to track which borrowers receive homebuyer education and counseling and report on the performance of those borrowers in aggregate. This would provide all of us with a much better understanding of the impact and value of homebuyer education and counseling.

Core support for a homeownership education and counseling infrastructure is critical so that broad access can be available across the country. Standards of quality are essential for housing counseling agencies, and the current National Industry Standards provide a strong framework. The HUD Counseling Grant dollars and the new HUD Office of Counseling play a key role in ensuring access and standards of quality. However, HUD or any other governmental funding will be insufficient to meet the scale of the need for quality homebuyer education and counseling. So it is essential to integrate a market perspective. Lenders should provide significant product incentives or rebates to counseled borrowers to reflect the value the lender is receiving — a quality new borrower who is prepared, less risky and ready to go. If the market reflects the value of this service through incentives, then potential new homeowners will be more willing to pay a larger portion of the cost of the homeownership education and counseling since they will be refunded that cost and more (through additional product incentives).

There are many variations of this concept — different splits in payments between potential homeowners and the lenders, payments funded through the transaction and reflected on the HUD-1, or full cost recovery to the counseling agency, but with a small portion of the funds held back for two to three years and paid to reflect borrower performance.

Sustainable homeownership is essential to prevent a repeat of the current housing crisis. Homebuyer education and counseling is a critical element, and we must determine how to use a small amount of core federal dollars to leverage a market approach that will achieve greater scale and create more successful homeowners.

NeighborWorks America Honors Senator Kit Bond with Lifetime Achievement Award



Former Senator Bond receives Lifetime Achievement Award.
(L-R): Kit Bond; Mark Stalsworth, executive director,
Kansas City NHS; John A. Wood, assistant city manager
 for neighborhoods, City of Kansas City;
Eileen Fitzgerald, CEO, NeighborWorks America 

NeighborWorks America, as part of its NeighborWorks Training Institute in Washington, DC this week, honored Former Senator Christopher S. “Kit” Bond with a lifetime achievement award for his more than 40 years of support to America’s families.
Presenting the award to Senator Bond, NeighborWorks America CEO Eileen Fitzgerald noted that he is known for a long string of accomplishments on behalf of families and accessible housing, beginning with his service as Missouri’s youngest governor and continuing through four terms as one of Missouri’s U.S. Senators.

“Senator Bond has been a leader for families and housing,” said Fitzgerald. “He continues that leadership as a co-chair of the Bipartisan Policy Center’s Housing Commission. We are excited and sincerely honored to recognize Senator Bond for all the work that he’s done and continues to do for housing in the United States.”

Learn more about Senator Kit Bond's work in support of affordable housing.