By Elizabeth Zach, RCAC staff writer
In 2006, just as the nation’s housing market was overheating and would eventually implode, Melissa Looney watched how prospective homeowners learned about mortgages. A decade prior she had started her housing career working as a mortgage technician. Something about the home buying process, she recalls, wasn’t right.
“I was seeing first-hand how people were being taken advantage of because of the huge amount of mortgage options available, which qualified them for larger mortgage loan amounts,” she recalls. “Payment amounts were increasing because the mortgage products offered included adjustable rate mortgages with payments that could change within 12 months, which eventually led to negative amortization, increased balances and increased payments. It was pretty obvious to me that people were taking on mortgages they would eventually not be able to afford, and once their payments would go up…that hit me really hard.”
Last year, HUD began requiring housing counselors to pass a standardized test to become HUD Certified counselors. RCAC is an approved and funded training provider.
Before the housing market tanked, Looney exited it herself in 2006. She had gained valuable experience as a loan processor for first-time homebuyers. She meanwhile undertook housing counseling training, which coincided with her leaving the retail side and going to work as a loan processor and later homeownership counselor for Self-Help Enterprises in Visalia.
“I was happy to step into a role where I could help out with what I saw was a greater need for education for families.”
To that end, Looney participated in a U.S. Department of Housing and Urban Development (HUD) sponsored three-day course that prepared her to pass an exam and become a certified housing counselor. Last year, HUD began requiring housing counselors to pass a standardized test to become HUD Certified counselors. RCAC is an approved and funded training provider.
RCAC rural development specialist for housing counseling, Donna Lea Brooks, taught the course which, says Looney, was effective helping her pass the exam and was made possible thanks to an RCAC scholarship.
“This was incredibly significant,” she says. “For RCAC not just to teach the course but to also, as a nonprofit, to be in a position, to provide scholarships is just amazing.”
With her certification, Looney will help with Self-Help’s Gateway Home ownership counseling and education program where she and her colleagues “reach out to the families throughout the Central Valley to help them with financial coaching, budget and credit counseling and home ownership education.”
It will be particularly important, she adds, to reach families before they meet with a potential landlord or realtor.
Until 2010, when President Obama signed the Dodd–Frank Wall Street Reform and Consumer Protection Act, there was no standard for minimum competency for housing counselors, explains Brooks, except that a counselor had to work for a nonprofit HUD-approved housing counseling agency.
“The problem was that many counselors were ‘siloed’ into certain counseling service types and may never have the need or get the opportunity to learn any other counseling service type,” Brooks says. “People who were really good at, let’s say, conducting homebuyer education and working with pre-purchase clients never had an opportunity or need to work with homeless clients or try to prevent eviction for a client.”
Brooks says she was fortunate to have done every type of housing counseling, including reverse mortgage counseling, mortgage banking, and residential real estate lending, not to mention managing up to 260 affordable housing units. She also taught adult homebuyer education classes for 16 years.
Although Looney has spent years working in the mortgage and housing industry, she acknowledges that there were aspects to the exam that, had she not taken the preparatory course, would have stymied her.
But, she says, “Helping low-income first-time homebuyer clients became my calling. Over the years, I helped hundreds of families become ‘mortgage ready’ and purchase their own home. I’ve also seen the cycles of appreciation and depreciation and the scams targeting homebuyers and homeowners.”
Looney first learned of the HUD certification and began preparing for the exam about a year ago. She had considered taking a webinar but then read about RCAC’s course, which is comprised of eight modules taught during three days. There also are speakers from HUD.
“We got first-hand information about the purpose of the exam and what to expect,” she explains.
Although Looney has spent years working in the mortgage and housing industry, she acknowledges that there were aspects to the exam that, had she not taken the preparatory course, would have stymied her.
“Such as, we need to be aware of the fair housing laws, which I didn’t really know much about,” she says. “There are very specific questions on the exam about that. There are also questions about tenant rights and fair housing evictions. On a day-to-day basis, I’ve never had to deal with tenant discrimination or evictions, but HUD really wants counselors to be aware of these issues. Donna helped us see the significance and how they will relate to our counseling work moving forward.”
Like Looney, who works with families heavily dependent on seasonal agricultural work in California’s Central Valley to support themselves and their families, Carolyn Grant has spent nearly the past decade counseling families in rural eastern Washington on finance, entrepreneurship and home ownership. She, too, participated in RCAC’s HUD exam preparatory course and, like Looney, describes the same need for potential homeowners to better understand mortgages, their rights and responsibilities.
Although Grant worked in housing and financial counseling for a decade before she took her current nonprofit post, she said that she had to study hard for the HUD counseling exam.
“I see things changing in the banking industry that could lead to the same kind of financial crisis,” says Grant, who works as a finance, entrepreneurship and home ownership coach in Moses Lake, Washington. “I work with good realtors and lenders, and I stay on top of them. But there are also mortgage companies still around that aren’t offering the best products to consumers.” She added that, like in California, where housing is scarce and prices have drastically risen in the past several years, Washington has a real estate inventory shortage.
“When people feel they might not get a house they had hoped to, they can make a bad decision,” she says.
Although Grant worked in housing and financial counseling for a decade before she took her current nonprofit post, she said that she had to study hard for the HUD counseling exam.
“I know the tools I can use and I know where to look stuff up if I have to, but with the exam, you have to actually memorize all of that,” she says. Adding with a laugh, “It was also difficult in my case because I’m a speed reader but with the test, you really have to read every word in the questions carefully.”
Although Grant is somewhat self-deprecating, Brooks says she has nothing but admiration for her and all of her students.
“They know the test is not going to be easy, and they’re out of their office for at least three days at my course,” she says. “I have met many counselors in the year and a half I have been conducting these trainings, and they are from all over the nation. Some are very new, some have many years of experience. Watching them network with each other and pick up tips and gather resources has been so gratifying.”
If she has any parting advice for her students, it’s in letting them know that she really does empathize with them. How could she not, she asks, when she herself recently took the exam.
“As an adult educator, it is very important that your students believe you and your abilities in what you are teaching,” Brooks says. “By virtue of standing at the front of the class, I am seen as the ‘expert.’ I want my students to know that I am practicing what I am teaching them. We are equals, I took the test, too, I passed and so can you!”
