Debt Counselors Feeling The Strain Of Subprime Meltdown

As foreclosures continue to skyrocket, debt counselors have become a last resort—sometimes the only resort—for thousands of panicked homeowners who don’t know how they’re going to keep their homes. “I don’t think people fully appreciate the pressure that’s being put on those counselor organizations today,” says a Housing and Urban Development official. In addition to offering financial advice, the counselors try to help negotiate payment plans with lenders, stave off foreclosure notices, and even offer mental health support for people so distraught that they become depressed or suicidal. The average pay: $30-50,000 a year.

Counselors have tried to keep up with the increasing demand for their services—Neighborworks, one prominent organization, trained 1,678 counselors in 2007 compared to 143 in 2004. More counselors are asking for foreclosure prevention training, and the organization is now offering stress management training as well. But the total number of financial housing counseling has remained about the same in the past several years due to limited government funding. And now, with a drastically increasing workload, organizations are worried that they won’t be able to offer competitive salaries to retain counselors at a time when they’re most needed.

“Counselors stressed out by desperate clients” [CNN Money]
(Photo: Getty)