Along with their recently announced HomeReady mortgage program, Fannie Mae also provided a major policy change regarding housing counseling. Fannie Mae will only accept housing counseling provided by HUD-approved housing counseling agencies. This valuable development will mean that the “housing counseling” provided by interested parties in the transaction, most commonly mortgage insurers, will no longer be accepted for Fannie Mae products.
Many of us have pressed this issue with their regulator, the Federal Housing Finance Agency, and with Fannie Mae. The perfunctory services provided by for-profit providers were typically delivered after the sales agreement and the mortgage application were signed by the consumer—which meant the major financial decisions had already been made.
Next up: Freddie Mac, what are you going to do?
While my initial anger is with the regulators and my inclination was to, “sick” HUD on Fannie, I agree with others that we HUD-counseling agencies should take the higher road and voice our true concerns on behalf of the consumers.
HomeReady’s requirements come too late in the process and may impose double education and cost requirements. Potential home buyers who were proactive in seeking us out prior to shopping for a home and financing will be penalized if they opt for HomeReady. After their six month roll-out period, Fannie Mae will no longer accept home buyer education certificates from anyone other than their online vendor. HUD-approved counseling certificates will not be accepted: why not?
For other than self-serving interests, I’m at a loss to understand Fannie’s policy regarding home buyer education. While creating a near sub-prime loan program with lower than normal mortgage insurance coverage, they have chosen to ignore the proven value of local, personalized one-on-one education and coaching through HUD-approved agencies.
Great victory for HUD approved agencies!