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Your (volunteer) services are requested

By , Friday, March 7, 2008.

I went to a slightly surreal "town hall meeting" on financial literacy yesterday -- surreal, because it took place in a tent pitched behind a Bank of the West branch office in Oakland's Fruitvale district, an area that's become a ground zero for foreclosures.

When I first heard Treasury Secretary Henry Paulson would be at the meeting, I was skeptical. I was even more so when I got there, because it looked like we were about to get a lecture from three middle-aged white guys -- Paulson, Charles Schwab (yep, THE Charles Schwab) and BancWest Corp. CEO Don McGrath -- about how this whole foreclosure mess could have been avoided if borrowers had just read the fine print on their loan disclosures.

The meeting turned out to be more than that (see story). And while financial literacy may be of limited utility in providing much immediate relief during the foreclosure crisis, it could be a cause that pays big dividends down the road -- and Inman News readers could play a significant role.

Somewhat lost in the discussion yesterday was an announcement that the Bush administration is looking for volunteers with expertise in finance to work with nonprofit groups that, among other things, provide advice to homeowners seeking to avoid foreclosure.

The USA Freedom Corps Financial Literacy Volunteer Initiative (how's that for a bureaucratic mouthful?) is sort of a lead generation site for nonprofits that are looking for volunteers. You enter your ZIP Code or state, and you get a list of nonprofits looking for help. When I entered the Oakland ZIP code 94610, I was offered 800 "opportunities" to volunteer.

There's a dedicated page for the Financial Literacy Volunteer Initiative, and a separate site to search for USA Freedom Corps volunteer opportunities in many other categories, including education and technology, children and youth, and animals and environment.

While anybody who volunteers should do so for their own, altruistic reasons, there may also be fringe benefits to getting out in your community and sharing your expertise. If real estate professionals are landing clients by blogging, could volunteering be a similar way to establish long-term relationships with home buyers?

It's evidently one motivation for the host of Thursday's meeting, Bank of the West, in its eight-year collaboration with Operation HOPE Inc., a "nonprofit social investment banking organization" founded after the L.A. riots to empower the poor.

One of the stated objectives of the Operation HOPE financial counseling center operating in Bank of the West's Fruitvale branch in Oakland is to turn renters into home owners. Bank of the West staffers also go into schools to teach students about credit, investment, and "the virtues of saving," and the bank says it plans to provide $75 billion in loans, investments and services to lower-income areas through 2015.

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Submitted by Jillayne Schlicke on March 8, 2008 - 9:50am.

The only way to give this any meaningful legitimacy is to ask the volunteers to sign a contract that states something like: "Volunteers are not allowed to solicit their students for business before during or after their volunteership."

If not, we're just opening up the doors to let the predators prey on the vulnerable once again.

Out-of-work or financially struggling people with financial backgrounds can apply for a job with Operation Hope or other non-profits. This will be a growth area for quite some time.

Of course, the opportunity to "make six figures your first year with no experience" is not available at non-profits.

 
Submitted by on March 10, 2008 - 7:26am.

The no soliciting students policy sounds like a sensible precaution, Jillayne.

Would you be OK if students approached tutors down the line and asked them to be their real estate agent, mortgage broker or loan officer?

With Operation HOPE, what often happens is people come in and get some advice on issues like how to clean up their credit, and it may take them 6 months or a year for them to get their act together and they are ready to become home buyers.

You are right too that their are opportunities at non-profits for people with experience in mortgage lending and finance, but that it's probably going to involve a pay cut for a lot of folks. They can't afford to pay much -- if they can afford to hire anybody at all. Regina Davis, chief executive officer of the San Francisco Housing Development Corp., told Paulson at the meeting that there are a lot of people out there with work experience that would make them great financial counselors -- she just doesn't have the money to hire them.

 
Submitted by Jillayne Schlicke on March 11, 2008 - 9:24am.

Hi Matt,

"Would you be OK if students approached tutors down the line and asked them to be their real estate agent, mortgage broker or loan officer?"

No way.

If so, our taxpayer dollars are now being spent funding a lead generation program for banks and lenders and Realtors.

As it is right now, banks, lenders, and Realtors already hold many free educational seminars all across the U.S. for the sake of generating leads.

When people come in for counseling, they are looking for a COUNSELOR not a salesperson.

If former bank employees, former mortgage broker employees and former Realtors want to apply for a job at Operation Hope or other nonprofits, they should do so but not for the sole purpose of using the nonprofit sector for their own immediate or eventual gain.

LOs were use to making six figures and they knew nothing about lending. These people STILL no nothing about lending, that is, the loss mitigation side. They are a bad fit for this kind of paid job, They want to get in there and slam these people into a high rate foreclosure rescue refi so they can support their lifestyle.

Instead, the non profits could find Master's level graduate students from the schools of psychology who have to put in hours as an intern in order to get their diploma. The homeowners need people with counseling skills. The options for people in financial distress could all be easily taught to the Interns. The counseling skills and the unbias are more important.

We need to treat people who need foreclosure counseling with respect, not as objects to maximize profit.

 
Submitted by on March 11, 2008 - 2:36pm.
Hmmm... I think I personally would rather have an experienced mortgage broker or loan officer walk me through my options for avoiding foreclosure (or advise me on how to go from being a renter to a homeowner) than a graduate student in psychology. Heck, I would rather share a taxicab with an experienced mortgage broker or loan officer than a psychology grad student. I share your concerns about those who would prey on distressed home owners, but I also know not everybody who works in lending is out to make a quick buck regardless of the consequences for their clients. Just as real estate agents and brokers stay busy with repeat business and referrals, I would think lenders who have earned good reputations and who have managed to keep them through the downturn will be rewarded when all this pent-up demand we keep hearing about from NAR starts generating sales. Let's hope the ethical ones are faring better during the downturn than those "making six figures (when) they knew nothing about lending." I'm not sure what the problem would be with nonprofits employing laid off mortgage workers, though. How are they going to "slam ... people into a high rate foreclosure rescue refi" if they are no longer loan officers?

 
Submitted by Carroll Straus on March 15, 2008 - 3:42pm.

The "dedicated page" wasn't. (Dedicated to Fionancial Literacy.) I have been researching ways to help people with this (which i saw coming) for 2 years now--and i have seen almost NO really useful thinking to date. Still have seen VERY LITTLE.

Not at the government level and not at the consumer level.

So it seems to be too soon to worry about the fox volunteerig at the henhouse!

 
Submitted by on March 18, 2008 - 7:17am.

Carroll you may need to update your browser. The link to the "dedicated page" is good, but it's Flash.

http://www.usafreedomcorps.gov/for_volunteers/find_opps/flvi.asp