By Peter Slavin

August 29, 2007 — In the wake of the houses and lives wrecked by Hurricane Katrina, it became clear to everyone that an incredible amount of money would be needed to help families rebuild.  As the Mississippi Development Authority (MDA) began to craft the program that would distribute billions of dollars in federal funds to Mississippi homeowners, staff members realized that money alone could not solve the challenges that lay ahead.  Recognizing that families would need an advocate, financial advice, and ongoing “safety net” services to navigate the road to recovery, MDA staff did something unprecedented. They enlisted Enterprise Corporation of the Delta (ECD) to provide required financial counseling and ongoing support to families eligible for Homeowner Assistance Grants up to $100,000. ECD is a nonprofit Community Development Financial Institution (CDFI) that builds assets and improves the quality of life in distressed communities. 

Donna Tally, NeighborWorks America, coordinated the training effort.

Recognizing NeighborWorks America as the industry leader in the field of pre- and post-purchase housing counseling, the chief executive officer of ECD, Bill Bynum, took little time in bringing the expertise of NeighborWorks to the table. The two organizations formed a partnership and started work on the creation and launching of a counseling effort that would include the writing of a curriculum, the recruitment and training of 60 counselors, and the development of innovative software — all designed to aid families in recovery and help them make informed decisions along the way. 

Many homeowners face “the incredible complexity of rebuilding,” says Bynum. “Having access to experts whose sole objective is to help residents navigate their way through the maze of post-Katrina obstacles will pave the way to success for thousands of homeowners.” Those obstacles include unscrupulous contractors, predatory lenders, and others ready to take advantage of people with a windfall from the state.

“The partnership between NeighborWorks America and ECD capitalizes on the strengths of both organizations to help families navigate the complex recovery process,” said Kenneth Wade, CEO of NeighborWorks America. “Together we are providing the assistance that homeowners need to achieve their rebuilding goals.”

Lifting the Weight Off the Shoulders of Homeowners

“It was so helpful to sit down with someone and review my options based on real numbers and my personal needs,” said Susan Knowles, a single Pascagoula resident. “I understand all the issues I might have to deal with, and I know that the plan I'm working with is a real way to reach my goals.”

Knowles’ counselor helped her find a reputable builder and addressed the inaccurate information on her credit report.

Client evaluations of the counseling have been “overwhelmingly positive,” notes Bynum. After an early session, one client wrote “I got more information today than I have received in two years.” Another remarked, “This gives me hope.... I was given resources I did not have.” And a third wrote that it “was as if the weight of the world was lifted off my shoulders.” The 60 counselors trained have already served almost 2,000 of an estimated 10,000 likely to qualify for federal assistance. 

Before homeowners receive their compensation grants, they must attend a small group meeting for an overview of the program. Immediately following is an individual session between the homeowner and an ECD counselor to review the homeowner’s specific circumstances and prospective recovery goals. Every homeowner leaves the required counseling sessions with a step-by-step recovery plan tailored to his or her particular needs.  Ongoing counseling is available free to homeowners on a voluntary basis.  Voluntary counseling provides assistance related to a range of issues including insurance obstacles, foreclosure prevention, financial solutions, and the building code. 

These families — most “physically, financially and emotionally overwhelmed after what they’ve been through — will not be left to navigate the complex recovery process on their own” says Donna Tally, the NeighborWorks consultant to ECD who helped design, develop, and execute the counseling program. “They're going to have a financial advisor, a helpful advocate every step of the way, if they choose.”

“We are doing whatever it takes to help these families, whether it’s finding clothing, eyeglasses or hearing aids,”says ECD Counseling Manager Laura Howe. The ECD counselors refer clients to other nonprofit agencies for help. ECD may even intercede if homeowners face disputes with contractors. 

Counselors have an array of technical tools integrated into the innovative software designed specifically for the program. The tools include:

• A Financial Feasibility Analysis tool so counselors can compare the funds available (grant amount, insurance proceeds, personal investment, etc.) with the cost to achieve the identified recovery goal and determine if there is a gap. 
  
• A "Best Fit" tool to identify which of several loan products a family might qualify for if they have a financial gap and need additional funds.
  
• A Corrective Action Plan tool used to identify and address financial obstacles (such as high debt, poor credit, income issues) that may prevent qualifying for a loan to cover the gap.

“We Can Conquer Anything” Attitude

A four-member team, led by Tally and made up of professional NeighborWorks trainers, trained 62 counselors in five waves over seven weeks in facilities up to 75 miles apart. Delivering “recovery”-focused counseling that would measure up to the high standards established by NeighborWorks America in the pre- and post-purchase business lines was a mammoth task.  But quality was paramount when it came to getting the counseling team ready. The training was broken into three comprehensive components: Boot Camp, Intermediate, and Advanced. Because time was of the essence and the task was “mission critical,” says Tally, the team had to be “very nimble and ready to change on a dime.”

When Katrina struck, there were only a handful of housing counselors along the Mississippi Gulf Coast. The ballooning post-Katrina demand for services, contrasted with the number of displaced workers, presented a hiring challenge when recruiting the counseling team.  ECD managed to recruit a number of individuals with financial backgrounds, but quickly realized that the most important prerequisite for being an effective counselor is to be a caring person. With NeighborWorks leading the training program, ECD managed to take folks from all backgrounds and experience — even a chemist and an engineer — and teach them to deliver high-quality recovery counseling to Mississippi families. Tally says, “We knew the financial expertise could be taught, that if we hired caring and empathetic individuals, we could accomplish almost anything.” ECD rolled out the counseling program in April, and all the hard work was rewarded when those first families walked through the doors. 

Tally says that the precedent that is being established in Mississippi is proof positive that financial counseling should be an integral component of any housing recovery strategy, be it disaster caused by hurricane, fire, tornado — or even those made by man.