News & Events

NY Times: The Benefits of Prepurchase Counseling

04/04/13 at 04:21 PM

A new study from NeighborWorks America, a community development agency, links buyer counseling to significantly lower default rates.

In an evaluation of 75,000 mortgages originated from 2007 to 2009, NeighborWorks determined that borrowers who went through its prepurchase counseling program were nearly a third less likely than noncounseled borrowers to fall behind in payments 90 days or more in the first two years after closing.

The reduction in delinquencies was the same for both first-time and repeat buyers.

The findings send a message to lenders and investors, said Eileen Fitzgerald, the agency’s chief executive: “Before you kind of tie somebody into a loan, you should be encouraging them to go to prepurchase education and counseling. You will make more money off of that person.”

 

Read the entire article on the NY Times site here.

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