A new set of education standards for homeownership counseling is getting widespread industry support -- and not a moment too soon.
Such an effort should go a long way toward taking the guesswork out of choosing a competent homeownership counselor, a teacher who can produce results -- specifically when it comes to saving homeownerships.
Studies have long shown, understanding financial basics, budgeting, mastering the use of credit and knowing the cost of homeownership is the foundation for a long-term lifestyle of homeownership.
Unfortunately debt, credit and other financial education specific to homeownership is frequently taught without accredited standards, unlike standards found in, say, college and university level studies or in government-regulated education requirements for licensed trades people and professionals.
Without standards what's learned can vary. If not standardized, the business of teaching homeowners to remain homeowners is also more vulnerable to special interests, fraud and deception, much as is the case with many entities with little or no regulations.
To bring both accreditation and credibility to the industry of homeownership counseling, at least on a voluntary basis, a group of lending institutions, community development organizations, real estate, mortgage insurance companies and the secondary mortgage market this week announced the "National Industry Standards for Homeownership Education and Counseling".
Its new website is designed to explain and promote the effort to both consumers in need and counselors current and future seeking to apply the standards.
To help beat back the scourge of foreclosures now sweeping the nation and to prevent such widespread financial calamities in the future, the effort comes at a time when putting stricter controls on risky mortgages has been tied up in the bureaucratic legislative and regulatory process for more than a year.
Giving consumers the tool of knowledge will help bridge the gap of consumer protection and have long lasting benefits that eventually couple with greater regulatory power down the road.
That's at least the hope of the founding National Advisory Council for the standards, which includes NeighborWorks America; the Housing Partnership Network; the U.S. Department of Housing and Urban Affairs (HUD); National Association of Realtors; National Association of Real Estate Brokers; Fannie Mae; Freddie Mac; Bank of America; Chase Bank; Wells Fargo Bank; National Council of La Raza and a host of others.
The standards include courses of study for consumers in various phases of homeownership and a code of conduct and ethics for counselors so that consumers can easily identify qualified homeownership educators and counselors.
Consumers needn't wait for the group to sweep the industry with its standards, but can now visit the website and find counselors already practicing under the guidelines.
Consumers can study a host of broad subjects before and during homeownership including, assessing homeownership readiness; budgeting and credit; financing a home; shopping for a home; maintaining and improving a home; finances during homeownership; community involvement and others.
Consumers need not wait until they are in trouble. Waiting for trouble to hit is never a prerequisite for any of the courses.
They can learn the pros and cons of homeownership; how to shop for a home; how to budget, set financial goals and use credit wisely; debt management; how to read, use and adjust credit reports and scores; how to navigate the mortgage maze to shop for and choose a home loan; how to choose a neighborhood; how to read a purchase contract; how to navigate escrow and how to save energy and money as well as obtain information on homeownership costs, taxes, retirement savings, insurance, home improvements, refinancing, home equity and landlord and tenant issues.
Teachers are schooled in the best time to teach which class based on the student's current position on the road to homeownership; they know how to assess consumers' educational needs; can determine healthy debt and credit levels; learned how to analyze budgets and savings and can help consumers develop an action plan and counsel them on following up, among other subjects.
