Released: December 04, 2007

Credit counselors take center stage

Source: Renae Merle, Washington Post (Free Registration)

In the middle of his speech yesterday on the administration’s efforts to fix the mortgage crisis, Treasury Secretary Henry M. Paulson Jr. paused to carefully spell out a toll-free telephone number that troubled homeowners can call for help.

The hotline is not staffed by government officials or mortgage lenders. Rather, the calls are answered by consumer counselors from nonprofit groups, which are taking an increasingly high-profile role in helping borrowers with mortgage problems.

The groups are acting in some cases as a buffer between lenders and homeowners. Legislation is pending before Congress that would tap NeighborWorks America, a national nonprofit group, to distribute $200 million to local counseling centers. In October, the Neighborhood Assistance Corporation of America, often a vocal critic of mortgage lenders, signed a deal with Countrywide Financial, the nation’s biggest mortgage lender, to help restructure loans for struggling Countrywide clients.

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