New Federal Home Program Starts With Financial Ed

It became abundantly clear during the housing meltdown that a lot of people were steered into mortgages they couldn't afford or didn't have the financial education to manage. Today we're all suffering, as homeowners are forced into foreclosures because they never understood the terms of their mortgages.

The U.S. Treasury's Community Development Financial Institutions Fund (CDFI) wants to make sure unscrupulous subprime lenders can no longer take advantage of buyers who don't have the education to make the best choices financially.

To help prevent this from happening again the CDFI recently awarded $2 million for pilot projects. Five programs located in California, Colorado, Georgia, New Hampshire, and North Carolina each won $400,000 to run their pilot programs. These startups will be demonstration projects that can be adapted elsewhere in the country. The five pilot programs will develop interactive online education; financial coaches; financial counseling targeted to the low-income/low-wealth population; financial workshops with one-on-counseling; and home-buyer mentoring.

Only by educating more borrowers will the cycle of foreclosures be broken.