Mortgage-Counseling Charities See Increase in Demand for Aid

As the mortgage industry faces trouble because of a proliferation of loans to low-income people, nonprofit groups have seen a surge in the number of people seeking help to battle foreclosures and other housing problems, reports The Wall Street Journal.

The variable interest rates offered by many subprime lenders—which serve people with weak or bad credit histories—often provide low introductory rates on mortgages that shoot up beyond the means of low-income homeowners.

Neighborhood Housing Services of Greater Cleveland tells the Journal that until recently, three-quarters of its clients needed help before buying a house, and the remainder asked for help after the purchase.

“Now those numbers are reversed,” says Paula Miller, a loan officer with the organization. “We’re doing more foreclosure-prevention and mortgage-delinquency counseling than ever.”

Low-income homebuyers are also facing lowered property values, say experts. The Urban Institute, in Washington, estimates that 1,500 charities provide housing or credit counseling to the poor.

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