Housing Counseling Cut In Budget Resolution
April 18th, 2011
HUD’s Housing Counseling Program took a major hit when Democrats and Republicans managed to settle their differences and prevent a government shutdown. Part of the budget resolution passed last week to keep the federal government running through September of this year included an $88 million cut to the program, which provides counseling on foreclosures, reverse mortgages, refinancing and pre-purchase services[1]. According to HUD itself, a spokesperson for which described the cuts as “painful” in addition to saying that the cuts “would not have been made in better circumstances,” HUD-approved housing counselors have helped more than 4 million families in the past two years.
Not surprisingly, there are a number of critics when it comes to this particular cut, including the National Council on Aging (NCOA), which believes that the loss of counseling funding will “impact its counselors’ ability to help reverse mortgage borrowers who are in default and at risk of foreclosure”[2]. That $88 million is part of a $1 billion cut that HUD will take as part of the budget resolution[3]. Many fear that servicers will be able to be even more “recalcitrant” when it comes to “restructuring mortgages so that families might not have to lose their homes” if the counseling services and other HUD offerings are no longer in place.
There was a last-minute attempt to amend the budget resolution to keep HUD counseling intact, but it failed to make the cut. Do you think that HUD’s counseling services should have been immune to the threat of budget trimming?
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[1] http://www.dsnews.com/articles/lawmakers-eliminate-88m-in-funding-for-housing-counseling-2011-04-15
[2] http://www.mortgageorb.com/e107_plugins/content/content.php?content.8359
[3] http://www.nonprofitquarterly.org/index.php?option=com_content&view=article&id=11401:a-goose-egg-in-the-fy2011-for-hud-housing-counseling-programs&catid=155:nonprofit-newswire&Itemid=986
April 18th, 2011 at 9:00 AM
Can we all now see that our government has joined forces with the banks to make this housing situation as bad as they possibly can. I’ve yet to figure out what their ultimate goal is but I’ll bet in the end the banks prevail over the people. Look at just the past 3 articles right here.
Foreclosures on hold awaiting fallout from robo signing debacle, B of A reports “minimal” profit from housing dept, and now HUD housing council budget cut to the point of elimination.
Translation: Banks temporarily stop all foreclosings to avoid costly ramifications of a judgment against them. Only to resume once they are safe and for the third time since this all began flood their inventories with REO properties, further delaying any hope for a decline in supply. B of A admits the cost of doing business-Foreclosure business- is costing them billions but will not take positive action to reverse this-I’ll get that in second. Instead they will downsize this department making it even more difficult for people to get any kind of help at all from them. Then as a precursor they just throw in that many loan mods are back in default. Translation: Loan modification has been a costly waste of time and you can expect the program cut to the bones so Barely anyone will get help.
Hud housing council cut so the banks are now free and clear of ANY Meaningful outside interference. Free to do-or not to do-what ever they please. I can hear the closed door conversation now. Banks “We don’t want to do loan mods anymore, we don’t want to give principle reductions that would make loan mods successful, we want to cut our whole program to shell of a fascad, leaving just enough to look like we care and will help when in actuality we won’t and don’t do anything for any body, this will most certainly put more cash in our pockets and thusly more in yours. Gov “How can we help! What if we were to cut out the housing council then you would have no watchdogs and and the people would have no recourse so you could set this up without interference.” Shake hands, Done deal.
Solution to A) eliminate the need for the housing council B) Put more profit into the banks pockets, C) cut the foreclosure inventory growth to a crawl, and D) as a bonus to the country start a growth of consumer confidence and ability to purchase.
Mandate Principle Reduction loan modifications on every loan-current or in default-issued prior to jan 1 2007.
How will this possibly accomplish all that. All those people now facing foreclosure-and those still current but struggling-will suddenly be able to afford their mortgage with a cash surplus allowing them to become productive consumers. Since they will be able to keep their homes-sure not everyone but most will-that many millions of homes will not end up in foreclosure slowing the growth for foreclosure supply. Without going into a long draw out example the banks WILL make more money from these loans than if were to foreclose on these properties. And finally since all these people would no longer need help the housing council can be eliminated without recourse and allow the gov to save this 88 million dollars and not hurt the people.