Many former mortgage brokers and loan officers are now working as counselors to help those at risk of losing their homes to foreclosure, writes James. R. Hagerty in today’s Journal.


With lending down and mortgage defaults up, employment in real-estate finance (including mortgage brokers) has shrunk from a high of 505,000 in October 2006 to 365,000 today, Mr. Hagerty writes. Meanwhile, nonprofit groups are expanding to assist the growing number of borrowers seeking advice on how to keep their homes. Legislation recently signed into law provides $180 million of federal funding for counseling for distressed borrowers, while the Bush administration has proposed an additional $25 million for this purpose starting Oct. 1.


In addition, a group of banks pledged $5.3 million in January to local mortgage-counseling groups in California.


Of course, such job swappers will likely take a huge pay cut — many applicants for these counseling jobs once made six figures at mortgage companies, while the starting salary for a mortgage-counseling job is about $35,000 a year, according to the article. Also, the increased need for such counselors is likely to be short-lived, easing up once the foreclosure crisis subsides.


Some nonprofit counseling groups are willing to accept former brokers. Such people are “often good counselors because they’re used to pushing hard to resolve problems, such as those that might stand in the way of a refinancing or modification of a loan’s terms,” according to the article. Some are less willing. “Some of them are the folks who got us into this mess,” Michael van Zalingen, director of homeownership services at Neighborhood Housing Services of Chicago, says in the article.


Readers do you think former brokers could serve distressed borrowers well as mortgage counselors, or do you think it’s the wrong business for them? — Lauren Baier Kim