The budget deal recently struck between Republicans and Democrats may slash housing counseling funding, forcing agencies to lay off high volumes of staff despite the foreclosure crisis being felt from coast to coast. One of the Department of Housing and Urban Development’s programs is the biggest source of funding for counseling agencies. The $88 million dollar funding presently offered would be reduced to zero according to the agreement. The effects of such a drastic reduction could be devastating. Currently, there are approximately 2,800 agencies approved by HUD in the U.S. These agencies provide a wide variety of services to homeowners and potential real estate buyers for free. In 2010 according to HUD, approximately 50% of the counseling provided was to help individuals facing foreclosure.
Apparently a $56 million fund was set aside for counseling for those trying to avoid foreclosure. Some say this fund is not nearly enough to supply help to all of those facing foreclosure. The organization that administers the funds, NeighborWorks, requested $113 million for 2011, yet they received just over half. Counseling agencies that provide real estate guidance provide services such as budgeting assistance, financial reviews, and foreclosure avoidance assistance (now more than ever). Those seeking to achieve mortgage modifications through the government’s new modification program have been directed by the Treasury Department to HUD-approved counselors via a national hotline. What happens if the funding is no longer there? Funds would be cut later in 2011, leaving counseling agencies to seek public or private funding to avoid massive layoffs. Agencies are already strapped and in need of more funding without cuts to their financial support.
Do you feel that reducing the funds to real estate counseling agencies is a good move?