From the front lines of foreclosure, counseling agencies struggle to meet demand

Housing counselors are struggling to keep up with strong demand for foreclosure prevention services, while some communities lack counseling resources all together, according to a new report by Housing Action Illinois, a counseling advocate, and Woodstock Institute.

 

The report, entitled On the Foreclosure Front Lines:  Surveying the Capacity of HUD-Certified Housing Counseling Agencies in Illinois, found that much of South Suburban Cook County, McHenry County, and parts of Northwest Will County had startling gaps in counseling services. Even in areas where several agencies actively provide foreclosure prevention counseling, four out of every five new foreclosure cases in 2008 did not access counseling services.

As regional foreclosures increase, particularly in suburban communities, access to housing counseling resources is critical to keeping families in their homes.  But the vast majority of agencies operating at full capacity and with limited geographic coverage, families that would otherwise be eligible for prevention services are often left to negotiate with the mortgage company alone--a situation that often yields poor results.

"Working with a nonprofit housing counseling agency is often the best bet for homeowners who are having trouble paying their mortgages.  But, as this report shows, there are many communities where there's no place for a distressed family to go," says Sharon Legenza, Executive Director of Housing Action Illinois.

The report also found that:

   1. In the Chicago region as a whole, counseling agencies provided 7.3 foreclosure counseling sessions per 100 foreclosure filings.  Large parts of south suburban Cook County and Lake County have less than seven foreclosure counseling sessions per 100 foreclosure filings, and high foreclosure parts of McHenry County and northwest Will County both have less than two counseling sessions per 100 foreclosure filings. In the City of Chicago, north and west suburban Cook County, and DuPage County counselors provided greater than 15 counseling sessions per 100 foreclosure filings.

   2. Approximately 20 percent of the agencies surveyed reported that they currently have a waitlist for their foreclosure counseling services and are scheduling appointments weeks or months ahead.

   3. Eighty-three percent of the agencies that responded are currently operating at full capacity, while the remaining 17 percent are operating at less than full capacity, largely due to an inability to fill open counselor positions.