Report: Illinois Housing Counselors Overwhelmed by Demand

Housing counselors in Illinois are overwhelmed by the demand for foreclosure prevention services. And, in areas where no such service exists, homeowners are often luckless in their attempts to stay in their homes, according to a report by the counseling advocate Housing Action Illinois and the Woodstock Institute. The report, “On the Foreclosure Front Lines: Surveying the Capacity of HUD-Certified Housing Counseling Agencies in Illinois,” is based on the results of a survey answered by 53 of Illinois’ 94 Department of Housing and Urban Development (HUD)-certified agencies. It said even in areas that have several agencies providing counseling services, 80% of new foreclosure cases didn’t access those services, and residents in Illinois’ south suburban Cook County, McHenry County and northwest Will County have little to no access to such services. Despite the small percentage of borrowers facing foreclosure that do turn to the agencies for help, the groups are inundated with calls, and some agencies are scheduling appointments weeks and months out. The problem is a lack of HUD-certified counselors. While 83% of the 53 agencies that participated in the survey reported they are operating at full capacity, the main reason the remaining 17% aren’t is because they can’t find qualified candidates to fill open counselor positions. The report makes six recommendations for improving the availability of foreclosure prevention services in the state, including improving the referral process to guide homeowners to additional resources, allocate resources to provide continuing education to new counselors and help train potential counselors and continue to fund the HUD-certified counseling even after the housing crisis has subsided in hopes of preventing another similar scenario. However, the report does not provide a potential funding source for its recommendations. The joint report comes on the heels of the news that the Home Affordable Refinance Program [HARP] is slow to get on its feet. While implemented in March, the program is just now showing slow results, according to a research report by Barclays Capital. “After two months of disappointing prints, we might be seeing some HARP effect this month, albeit very muted. Freddie Mac 30y prepayments came in 2% faster on average, mostly driven by a mild 6-10% pick-up in 6s and 6.5s prepays, in contrast to a 3% retreat in 4.5s and 5s,” the report said. Barclays’ analysts also believe the situation won’t get better, as mortgage rates are slowly starting to creep back up, limiting HARP’s potential. Write to Austin Kilgore