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Fannie Mae to Reinstate Homebuyer Education and Counseling
10/28 11:51 AM
WASHINGTON, Oct. 28 /PRNewswire-FirstCall/ -- Fannie Mae (FNM:$0.7479,$0.067900,9.99%) today announced that it will reinstate a requirement for homeownership counseling and education for first-time homebuyers obtaining a MyCommunityMortgage(R) loan or a loan that relies on nontraditional credit to qualify. Effective January 1, 2009, the requirement is geared toward helping borrowers better assess their options and responsibilities both before and after they purchase a home.
"High quality counseling provides the first-time homebuyer in particular with reliable information and the resources necessary to make the kind of informed decisions that ultimately lead to sustainable homeownership," said Herb Allison, President and CEO, Fannie Mae (FNM:$0.7479,$0.067900,9.99%) . "In this extraordinary market, we think it is critical to reinstate this requirement and to work with counseling agencies and our lender partners to help homeowners succeed."
All required borrower counseling will be provided according to the National Industry Standards for Homeownership Education and Counseling, or those of comparable quality as established by other organizations. The National Industry Standards for Homeownership Education and Counseling were developed by a national advisory council of industry stakeholders, including Fannie Mae (FNM:$0.7479,$0.067900,9.99%) , and spearheaded by the NeighborWorks(R) Center for Homeownership Education and Counseling. Fannie Mae (FNM:$0.7479,$0.067900,9.99%) has long promoted and supported the development of industry-wide standards to ensure high quality and consistent pre- and post-purchase homebuyer education.
"Too often, homebuyers arrive at the settlement table without a full understanding of the terms and conditions of their loan or the overall responsibilities of homeownership. Educated buyers are able to make better choices to achieve sustainable homeownership," said Ken Wade, CEO, NeighborWorks. "Now, more than ever, the housing industry recognizes the need to ensure high quality education, and counseling is a key step on the path to homeownership, particularly for new homebuyers. We applaud Fannie Mae (FNM:$0.7479,$0.067900,9.99%) for taking this step."
"Certified housing counselors are experts on the process of planning for buying a home, and keeping that home once you're there," said Susan C. Keating, President and CEO, National Foundation for Credit Counseling, whose 1,630 certified housing counselors offer pre-purchase counseling in 847 locations across the country. "We're pleased to be working with Fannie Mae (FNM:$0.7479,$0.067900,9.99%) in supporting the effort to ensure that Americans embarking upon the long journey to homeownership do so as prepared as possible."
Consumer Credit Counseling Service (CCCS) of Greater Atlanta, a HUD-certified housing counseling agency, provides pre-purchase housing counseling for consumers at 18 offices in four Southeastern states. Prospective homeowners learn about the home-buying process, as well as the costs involved in the care and maintenance of a home. "Any person who receives pre-purchase housing counseling understands the financial obligations involved in homeownership and learns how to budget their income to pay for all of these obligations," said Michelle Jones, Vice President of counseling for CCCS of Greater Atlanta.
Fannie Mae (FNM:$0.7479,$0.067900,9.99%) will continue to encourage face-to-face education and counseling, with some flexibility for telephone counseling to accommodate borrowers who are unable to attend face-to-face sessions or who do not have an eligible provider in their area. The counseling curriculum, provided prior to closing by an independent and certified third party agency or counselor, will cover a variety of topics including: readiness for homeownership; budgeting and credit; selecting a home; obtaining a mortgage; and maintaining a home. In addition, homebuyers will receive a personalized assessment of their financial position and readiness for homeownership, and an analysis of their credit history and current financial situation.
"Housing counseling gives sound mind in the home buying process. Financial education is essential to making prudent money-making decisions," said Rev. Elmira Smith-Vincent, President and CEO of the Flint, Michigan-based Mission of Peace which provides counseling to individuals and families.
MyCommunityMortgage provides lenders a conforming alternative for low- and moderate-income borrowers and provides options that can help lenders serve communities and provide financing options to teachers, police officers, firefighters, health care workers, eligible military personnel and people with disabilities.
"At Citi, we believe homeownership plays an important role in improving people's lives and strengthening communities. For many people, access to quality first time homeownership counseling is key to owning and keeping a home," said Sanjiv Das, CEO, CitiMortgage. "This year, Citi's Office of Financial Education celebrated the fourth anniversary of our unprecedented 10-year, $200 million global commitment to Financial Education," he added.
"An informed homebuyer is an empowered homebuyer and we commend all efforts to enhance consumer education requirements," said Cara Heiden, Co-President, Wells Fargo Home Mortgage. "Homeowners succeed financially only when they fully understand their financial options and available mortgage options. Wells Fargo has a long-standing commitment to offering a variety of homebuyer education opportunities and our experience demonstrates consumers are less likely to need future assistance if they enter the loan origination process with a strong knowledge base."
For borrowers purchasing a two-to-four-unit property under the MyCommunityMortgage product, Fannie Mae (FNM:$0.7479,$0.067900,9.99%) will continue to require pre-purchase education and counseling, as well as landlord counseling in accordance with its Becoming a Landlord education curriculum or a program with similar content: https://www.efanniemae.com/lc/publications/pdf/landlord.pdf. In addition, post-purchase, early delinquency counseling continues to be required for all borrowers obtaining a MyCommunityMortgage loan, regardless of property type. Read the Fannie Mae Selling Guide for details: https://www.efanniemae.com/sf/guides/index.jsp.
For more information, see announcement 08-25, Homebuyer Education and Counseling, on efanniemae.com and the "Find a Counselor" search at https://www.efanniemae.com/is/hcounselors/index.jsp?from=hp.
Consumer Credit Counseling Service of Greater Atlanta is a 501(c)3 nonprofit community-service agency that provides confidential budget counseling, money management education, debt management programs, bankruptcy counseling and education, and comprehensive housing counseling. The agency served more than 400,000 consumers in 2007, primarily from low- and moderate-income households, in all 50 states.
Consumers can speak to counselors in English and Spanish 24 hours a day, 365 days a year, by phone at 1-800-251-CCCS, and also access the agency's web sites, www.cccsinc.org and www.cccsenespanol.org where live-chat counselors are available around the clock.
Mission of Peace is a faith-based, non-profit organization based in Flint, Michigan, that provides homeownership counseling to individuals and families. Mission of Peace National Corporation is a United States Department of Housing and Urban Development (HUD) National Housing Counseling Agency with an affiliate network of housing counseling agencies throughout the United States of America.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior and build capacity for its members to deliver the highest quality financial education and counseling services. NFCC members annually help more than two million consumers through close to 900 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC member, call 1-800-388-2227, (en Espanol 1-800-682-9832) or visit www.nfcc.org.
NeighborWorks America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. To date, we have assisted nearly 850,000 low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network -- more than 230 community development organizations working in 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks organizations have generated more than $12.4 billion in reinvestment in these communities. NeighborWorks America is the nation's leading trainer of community development and affordable housing professionals.
Organizations providing homeownership education can endorse and adopt the National Industry Standards for Homeownership Education and Counseling, or integrate the recommended benchmarks into their business operations. For more information, visit the Center for Homeownership Education and Counseling (http://www.homeownershipstandards.com).
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Wells Fargo Home Mortgage is one of the nation's leading retail mortgage lenders and servicers of home mortgages. As a division of Wells Fargo Bank, N.A., it has a local presence in more than 2,400 mortgage stores and bank branches, plus the capabilities to serve the home financing needs of customers nationwide through its call centers, Internet presence and wholesale lending operations. Wells Fargo Home Mortgage services loans for more than 8 million servicing customers.
Fannie Mae (FNM:$0.7479,$0.067900,9.99%) exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae (FNM:$0.7479,$0.067900,9.99%) has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by providing funds to mortgage bankers and other lenders so that they may lend to homebuyers. In 2008, we mark our 70th year of service to America's housing market. Our job is to help those who house America.
MyCommunityMortgage is a registered mark of Fannie Mae (FNM:$0.7479,$0.067900,9.99%) . Unauthorized use of this mark is prohibited.
SOURCE Fannie Mae (FNM:$0.7479,$0.067900,9.99%)