What a foreclosure counselor does
- Reviews your finances
- Helps you establish a budget
- Explains your non-foreclosure options, such as loan modification, short sale, or deed in lieu of foreclosure; helps you navigate the process with any chosen option
- Advocates on your behalf with lenders and loan servicers.
Counselors should also be up front about discussing their own track records as well as the track records of the agency they work for.
Expect to spend two to 24 hours with a counselor, depending on the complexity of your foreclosure situation, including how many lenders you have to provide documentation to and negotiate with.
Be sure the counselor is looking at your situation holistically—not just at your foreclosure. When counselors focus only on your mortgage, they’re not seeing the whole problem, says Martha Viramontes, director of housing at ClearPoint Credit Counseling Solutions in Los Angeles. Expect an action plan containing the tasks you’ll perform to change your financial situation.
You can get some concrete results by listening to your counselor: The study also showed that home owners who received loan modifications in 2008 and 2009 reduced their monthly payments by $267 more than those who didn’t get counseling.
Study bottom line: Odds of bringing loans current were 53% higher if you received pre-modification counseling than if you didn’t.