TheMReport — News and strategies for the evolving mortgage marketplace.
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20 | TH E M R EP O RT FEATURE first-time homebuyers and that the down-payment must come entirely from their own funds. "In fact, second or third-time buyers are eligible for mortgages with 3 or 5 percent down-payments, and they can use grants or gifts to cover all or part of that." While consumers face many hurdles in the loan process and lenders must constantly manage risk and regulations, Rodriguez thinks the latter can and should do more, starting with properly valuing homebuyer education and counseling. A study by the Urban Institute for NeighborWorks America found that buyers who have received the association's home - ownership education and counsel- ing were significantly less likely to default early in the mortgage payback period. Compared to non-National Foreclosure Mitigation Counseling (NFMC) homeowners, counseled mortgag- ers are nearly twice as likely to receive a "cure" for their serious delinquency or foreclosure. They are about 1.5 times more likely to avoid mortgage re-entry into a troubled status after receiving a loan modification fix, and nearly three times as likely to receive a products that are not typically on the traditional loan officer's radar. "For example, housing finance agencies have loan products spe- cifically designed for low down- payment borrowers, and in many cases these products don't require mortgage insurance, which helps with affordability," she adds. Loan production at the Pennsylvania Housing Finance Agency in 2015 increased 27 percent over the previous year. As of April 1, 2016, the PHFA, which offers a network of counseling agencies to provide potential borrowers the resources they need before applying for a mortgage. PHFA has assisted nearly 163,000 families and indi - viduals in achieving the American dream of homeownership by providing total funding in excess of $12.5 billion. The goal is to help Pennsylvanians not only qualify for a mortgage, but also be a successful homeowner over the long term. "They may not be able to purchase a home right now, but with no-cost homebuyer services provide by PHFA, homeownership often can be obtainable," says Kate Newton, Homeownership Director at the 44-year-old agency, hitting on the relationship-centric service theme versus the transactional. In 1982 when PHFA's Homeownership Division was es- tablished, first-time homebuyers and families with special needs were the focus, but now the agency also caters to repeat and move-up buy- ers, families and single people with attractive interest rates, lower fees and a mortgage tax credit program that boost mortgage affordability. Whitehall, Pennsylvania-based Mortgage America recently received top honors for the third consecutive year in PHFA's ranking of its lend- ing partners. Newton echoes Gardner's point that prospective homebuyers should not get hung up on that "most common misconception" that a 20 percent down-payment is required to purchase a home. The PHFA, which requires that borrowers contribute the lesser of at least 1 percent of the home sales price or $1,000, connects Keystone State consumers with down- payment, closing cost, county assistance programs, and more. "Our proactive and high-touch servicing for the life of the loan promotes a positive, long-term relationship with the borrower," adds Newton. How has HLP been received in the mortgage marketplace? Having the top six commercial banks and 22 of the top 25 as clients cer - tainly speaks volumes. The neutral, national and non-profit utility— "we're a technology company that's really a social enterprise," says Melchiorre—acts as a digital highway system to efficiently connect all the important industry stakeholders for the purpose of resolving issues affecting mortgage readiness for prospective home - owners. HLP, which launched in December 2015 the HLP.guru app to help people qualify for home- ownership, not only facilitates much-needed accessibility, trans- parency, consistency and customer service in the mortgage process, it proves that the greater good is not just a talking point. Give & Learn F inancing a home purchase can feel like a long, ardu- loan modification cure. In fact, NFMC-counseled homeown- ers receiving a modification had their annual mortgage payment reduced by an average of $4,980. The counseling option not only is a recognized tool for reducing risk, it builds relationships. "When working with a borrower who a lender might immediately dismiss as not credit- worthy, our advice is to be pa - tient," Rodriguez says. "Help the borrower connect with a housing counselor, work with her while she improves her credit and col- lects the necessary documentation to make it through underwriting. Owning a home is a long-term commitment. I think that it's not too much to ask a lender to take a longer-term view of helping a customer get the right mortgage." Consumers obviously should do their homework before starting the home-buying process. After all, it's the biggest purchase most people make in their lifetimes. They need to know that not all lenders offer all products, and shopping around for a mortgage is "essential" to finding a financ - ing package best suited for them. Rodriguez says that housing counselors often are aware of loan Cam Melchiorre, president and CEO of HLP, at the company's Baltimore office with EVP and Chief Strategy Officer, Mark Cole.