HUD Turns to Faith-Based Counseling.(Department of Housing and Urban Development )

New York -- Department of Housing and Urban Development secretary Alphonso Jackson thinks a little religion might help bring down the sky-high delinquency rate on FHA loans.

Saying that the default rates "are much lower than they were," secretary Jackson told MSN recently that he believes the overdue rates on FHA loans are still too high. According to the MBA's quarterly delinquency survey, 12.22% of FHA loans were at least 30 days past due as of Sept. 30, and 2.84% were in foreclosure. While the delinquency rate is 13 basis points lower than a year earlier, the foreclosure inventory has increased slightly, according to the MBA numbers.

The HUD chief said he has instructed the assistant secretary for housing to recommend ways that the FHA can reduce the number of foreclosed properties that end up in the possession of the FHA.

And secretary Jackson said that he believes homeownership counseling, particularly as practiced by faith-based organizations, can help HUD achieve that goal.

He says that the FHA provides homeownership opportunities for low-and moderate-income homebuyers, and that faith-based counseling organizations may have a better incentive to help borrowers stay in their homes than for profit counseling companies.

"They are not there for the profit. They are there to help people buy homes," he said in an interview after ringing the opening bell at the New York Stock Exchange in January.

Secretary Jackson said one Los Angeles-based organization that is affiliated with a religious congregation has not experienced a single default on FHA loans originated through its homeownership program. While the church-related portfolio of loans is small, the success of the effort demonstrates the power that faith-based organizations bring to the table, secretary Jackson said.