The Role of Default Counseling for Mortgage Borrowers in Financial Distress

Abstract

Homeownership has long presented an opportunity for economic mobility. Starting in the mid-1990s, the housing boom spurred record numbers of home sales throughout the United States (Gramlich, 2007). However, as housing values decreased and employment markets slackened in the latter half of the 2000s, the 'American Dream' turned sour. As foreclosure statistics continue to surpass record levels, approaches to preserving homeownership have become increasingly important. Default counseling is central to current approaches for addressing the rise in foreclosures (Collins & Orton, 2010). An understanding of the foreclosure process and its alternatives helps place default counseling in context. The role of default counseling, rationales for default counseling, the impacts of default counseling and borrower responses to default counseling: a case study and loan modification counseling are discussed. (PsycINFO Database Record (c) 2016 APA, all rights reserved)