The Daily Record

Credit Counselors Get President's Ear

Freehold-based Novadebt on national stage

Daily Record — Saturday, March 29, 2008


Joel Greenberg spent enough time advising family, friends and corporations about financial problems that he figured there might be a big demand for his services.

But this much?

"I just saw it as a benefit," Greenberg, president and chief executive officer of Freehold Township-based Novadebt, said earlier this week. "People need guidance and they need help. They need somebody who understands and knows the ropes."

Novadebt was squarely in the spotlight Friday, when President Bush visited the company, met with counselors and highlighted its role in trying to help the nation's consumers work their way out of debt.

The credit-counseling service, free to consumers, works as an intermediary between consumers and lenders. It helps consumers develop a budget. It figures out a plan to pay their debt. And sometimes, it convinces lenders to agree to more favorable terms. Its funding comes mainly from the financial services industry.

Colleen Hernandez, president of the Home Ownership Preservation Foundation in Minneapolis, told a Philadelphia Federal Reserve seminar this week that the foundation was receiving 4,500 calls a day from frantic homeowners looking for assistance with their mortgages.

Hope Now is a consortium of 10 credit counseling agencies, including Novadebt.

Under a new arrangement with loan servicers, counselors can obtain facts about a borrower's loan. After counselors understand the financial situation, they can propose a modification of the loan to the servicer.

Still, only 30 percent of the clients who had undergone financial counseling were eligible for a loan modification, she said. And those are only a fraction of the clients who made it to counseling sessions after initial screening.

Hernandez said her message to worried homeowners is: "Help is available. The earlier you call, the better off you are."

Consumer advocates have called on President Bush to more aggressively help consumers. New Jersey Citizen Action wants the federal government to purchase lenders' troubled loans at a huge discount, which would stabilize the payments for home owners and keep them in their homes.

"The free market has run amok," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action. "In order to lose all this money, somebody had to make all this money. Now this bubble burst and all the (discussion is) about bailing out Wall Street. They're not focused on the thousands of people losing money and their homes."

If Greenberg, 60, and a Fort Lee resident, has time to step back and reflect, he could be excused for being overwhelmed.

He left his job as a chief financial officer in 1991 to start Garden State Consumer Credit Counseling with a partner. Since then, the company, now called Novadebt, has grown to 200 employees and seven offices in five states. It has 20,000 clients who are in debt management plans, and it counsels 10,000 consumers a month, Greenberg said.

With the country flirting with a recession, caused at least in part by the troubled housing market, Greenberg got a call from the White House this week proposing a visit by the president. Greenberg extended a formal invitation.

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