Let's Make Home Happen

December 2017, Volume 6 Issue 6

Incorporating Housing Counseling in the Mortgage Transaction

Over the past 18 months, the Office of Housing Counseling (OHC), in partnership with Freddie Mac, worked on creating a foundation for sharing housing counseling information among stakeholders in the housing counseling and mortgage industries.

The foundation consists of a standard dataset of counseling terms from HUD Form 9902, using the data standards of the Mortgage Industry Standards Maintenance Organization (MISMO), an entity that maintains a repository of data elements used by the mortgage industry. Mortgage-related organizations use these data elements to program their loan origination and servicing systems.

The significance of this effort is transformative to the housing counseling industry in different ways. The effort addresses the automation impediment to the integration of counseling in the mortgage transaction, often cited by lenders and loan originators. Additionally, this initiative standardizes counseling data and its collection through an automated process.

The result improves data consistency and promotes confidence in data reliability. Furthermore, these procedures facilitate communication and reporting from housing counseling agencies to funders. Freddie Mac began using the standard dataset in reporting counseling activities in the second quarter of 2017.

In September 2017, OHC and Freddie Mac sought approval from MISMO to adopt and incorporate the counseling dataset to the repository of standard data elements. A decision from MISMO is expected by the end of the calendar year.

man and woman looking over mortgage transactions