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$2 Million For a Credit Counseling Center

Posted by: Henry Baum | Jun 12,2008


In Atlanta, a 2 million dollar grant has been given to the Consumer Credit Counseling Service to help homeowners facing foreclosure.  This can be considered a kind of test market to see how successful the credit counseling operation will be.  It’s estimated that the grant will be able to help 80,000 new homeowners in the Atlanta, GA area.  The grant will not be the first of its kind – similar grants may be awarded to credit counseling centers across the U.S.

The grant money will be mainly toward updating the Atlanta counseling center with new software.  It’s projected that a credit counselor will be able to handle 1000 credit counseling sessions a year.  Combining this software with a new stable of counselors means that more homeowners will be able to find help during the housing crisis.  New credit counseling measures matched with new regulations on the lending industry will potentially lift the country out of the current housing crisis. 

What is Credit Counseling?

A credit counselor is a debt expert who help consumers deal with their overall debt picture.  As homeowners are dealing with a number of other debts besides a mortgage – including car loans, credit card debt, and other outstanding debts – a credit counselor looks at the borrower’s overall debt picture.  The software that will be utilized following the grant from the Ford Foundation will help the credit counselor crunch these numbers.  

The credit counselor will take into account all outstanding debt and expenses and determine the best ways for a borrower to manage debt.  This could include reducing expenses, diverting funds to a particular debt, or taking out a new type of loan, such as a debt consolidation loan.  In the Atlanta office, credit counselors will be focused specifically on how homeowners can save their homes, rather than focusing on tackling credit card debt, which is the concentration of a number of credit counselors.  

In addition, some credit counselors take the role of renegotiating debt with creditors – either reducing the amount of payments a month, the amount of debt overall, or both.  For many borrowers, it is helpful to have an intermediary, rather than trying to negotiate debt themselves.  However, there are some credit counseling services that are far from negotiating debt and can actually make a debt situation worse.  The better debt counselors are not-for-profit, such as the debt counseling service in Atlanta, which is able to function via a major grant.  

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