Home Buying Help Online: Government Offers New Tools and Rules

On April 15, the Consumer Financial Protection Bureau (CFPB) gave mortgage lenders additional instructions about the housing counselor lists they must provide to borrowers.

The federal agency also directed home buyers to an online tool they can use to find counselors in their area. It’s all part of a new push to encourage consumers to get home buying help and advice prior to making a purchase. Counseling can be particularly helpful for first-time buyers who have never been through the process before.

Government-Approved Counselors Offer Home Buying Help

According to Richard Cordray, director of the CFPB, the new rules and tools are designed to help home buyers make sound financial decisions:

“Buying a home is often the largest financial decision in a consumer’s lifetime, and we want to ensure that consumers can access the independent and informed advice they deserve before making that decision.”

Government home-buying help comes in many forms. In this case, we are talking about a national network of trained and certified counselors who can offer advice on home buying, renting, mortgage foreclosure and credit issues. Counselors must meet certain criteria before they can be added to CFPB’s list.

In addition to the lists provided by lenders, the CFPB offers an online search tool to help home buyers find local counselors. To find government-approved home buying help in your area, visit the following website: http://www.consumerfinance.gov/find-a-housing-counselor/

Counseling is typically provided at little or no cost to consumers. This is intentional, since many of the people who need help the most often have low to moderate income.

Mortgage Lenders Must Provide a List of Housing Counselors

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, bringing with it a slew of new rules for mortgage lenders and other financial companies.

One of the new rules had to do with the housing counselors mentioned above. In short, Dodd-Frank requires mortgage lenders to give loan applicants a list of local, government-approved housing counselors who can provide home buying help and advice.

Mortgage applicants typically receive these lists within days of applying for a home loan. It’s one of several documents and disclosures lenders are required to provide during the application stage. Starting in August, lenders must also provide a newly designed loan estimate form to help borrowers evaluate and compare the costs associated with borrowing.

Lenders can meet the housing counselor list requirement by using the lists provided by CFPB, or by creating their own lists using data provided by the Department of Housing and Urban Development (HUD).

A Great Resource for First-Time Buyers

First-time home buyers typically have a steep learning curve when they first enter the market. This process brings a lot of paperwork and jargon that first-timers often find confusing. That’s why we encourage “newbies” to seek help and counseling when needed, before they get too far into the process.

The government-approved housing counselors mentioned above are a great source of home buying help and advice. They can explain current loan options, financing strategies, credit-related issues and more. They also offer tips on avoiding financial problems that can lead to foreclosure.

HBI Offers Help for Home Buyers Too

The Home Buying Institute has been offering help for home buyers since 2005, in the form of educational materials. Our website currently contains more than 400 articles about the home buying process, mortgage loans, credit issues and more. We add new articles every week, to keep consumers informed about the latest trends in the housing and mortgage industries.

To access our library of articles and tutorials, just click on “learn” in the main menu and select from the drop-down items.