For
Immediate Release
November
22, 2004
Contact:
Becky Fleischauer,
202-220-2360; bfleischauer@nw.org
NeighborWorks
Marshals Homeownership and
Hope
for the Holidays
Neighborhood
Reinvestment CEO Sets Aggressive Goal for
Closing
the Homeownership Education and Counseling Gap
Washington,
D.C.
– Families who celebrate the holidays in safe, affordable homes
this year have access to a host of wealth-building opportunities.
To ensure more families have those opportunities, Neighborhood
Reinvestment Corporation CEO Kenneth D. Wade announced NeighborWorks
Center
for Homeownership Education
and Counseling (NCHEC) will triple the number of counselors certified
across the nation—increasing national capacity to serve more than
two million individuals each year by 2007.
“For
families, owning a home is an opportunity to get ahead—to start
building wealth they can use to send the kids to college, to invest
in a small business, or to finance a secure retirement,” Wade
said. One survey of consumer finances found that low-income homeowners
had a net worth 12 times that of renters at the same income level.
NCHEC
is the largest initiative of its kind to bring families of modest
means into the economic mainstream by helping them achieve one
of their primary goals in life: buying a home. Using a ‘train
the trainer' model, NCHEC creates a national force of certified
counselors, who have to date served almost 500,000 people with
pre- and post-purchase guidance and education. For those receiving
high-quality education and counseling, delinquent payments at
the 90-day mark are cut by a third. And a recent study found that
borrowers who received counseling have half the default risk as
those who did not. Despite its proven advantages, only 15 percent
of current first-time homebuyers receive adequate counseling and
education.
Wade
said NCHEC's capacity is growing just in time. As the number of
consumers who could benefit from such homeownership education
and counseling grows at a pace too fast to serve, Wade projects
a ‘counseling gap.' According to a recent study by Neighborhood
Reinvestment, at the current rate, from 2005 to 2025, 15.8 million
first-time buyers will go uncounseled, including 3.2 million African
Americans, 3.0 million Hispanics, and 6.3 million lower-income
households.
“We
must do all we can to ensure that the biggest investment of a
prospective homeowner's life is successful by better preparing,
educating and counseling prospective buyers about the typical
gamut of regulations, the unplanned expenses, growing predatory
lending practices and other potential challenges,” Wade said.
Wade
said the increasing array of loan products and the blurred lines
between subprime and predatory lending makes high quality counseling
even more important: “We want to create a seismic shift in power
and information toward the consumer. An informed buyer is an empowered
neighbor whose wealth and contribution to his or her community
multiplies.”
Using
the reach of Neighborhood Reinvestment Corporation's NeighborWorks
network, which includes 2,700 communities across the nation, a
primary goal of the homebuyer education and counseling initiative
is closing the disturbing homeownership gap between white and
minority families. In the third quarter of 2004, 49 percent of
blacks owned a home, compared with 76 percent of all whites, according
to the U.S. Census Bureau. The homeownership rate for Hispanic
households was close to 49 percent.
Working
to ensure that homeowners buy and keep their homes,
NeighborWorks organizations use a Full-Cycle Lending SM approach
that combines pre- and post-purchase homebuyer education with
flexible loan products and property services, such as inspection
and rehabilitation. The comprehensive approach covers all stages
of homeownership to help ensure long-term success. Homebuyers
are counseled in finding an affordable mortgage rate, locating
downpayment assistance, budgeting for their monthly payments,
planning for contingencies such as repairs, and avoiding delinquency
with better money management skills.
Related
Links
About
NeighborWorks
The
NeighborWorks network is a nationwide network of more than 230
community development organizations working in nearly 2,700 urban,
suburban and rural communities across America.
These organizations engage in revitalization strategies that strengthen
communities and transform lives. Neighborhood Reinvestment Corporation
provides financial support, technical assistance and training
for the NeighborWorks network. In the last five years alone (FY
1999-2003), NeighborWorks organizations have generated more than
$7.3 billion in reinvestment and helped more than 300,000 families
of modest means purchase or improve their homes or secure safe,
decent rental or mutual housing.
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