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Publication Date

June 2009


Jonathan Spader


In the past decade, provision of pre-purchase homeownership education and counseling (HEC) has become a central component of regulators’ strategies for protecting low-income consumers in the mortgage market. However, very little is known about HEC’s effectiveness. Moreover, existing studies of HEC’s impact on participants focus primarily on loan performance.

While such studies are directly relevant to lenders, increased public funding for pre-purchase HEC provision requires evaluation with respect to a broader set of outcome measures.

In particular, the current subprime crisis raises important questions about the ability of pre-purchase HEC provision to improve consumers’ evaluation of alternative mortgage options.

This article examines the impact of pre-purchase HEC on mortgage search, finding evidence that the pre-purchase HEC alters participants’ mortgage search behaviors.

Topics(s): Affordable Homeownership, Homeownership Counseling, Housing Policy, Mortgage Finance