The Defunding of HUD Counseling Agencies is Devastating

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At a time when record numbers of foreclosures are undermining the well-being of millions of families and the well-being if not the very viability of thousands of urban, suburban and rural communities throughout the U.S. we are both shocked and troubled by the decision by Congress and the Administration to end funding for housing counselors and their organizations.

There can be no question that our nation’s homeowners need help. In the past year 1.2 million homes were repossessed, more than 3 million foreclosure actions were started and one out of every ten homeowners had missed at least one mortgage payment. Most of the families affected are ordinary Americans, working people whose only interaction with America’s financial system has been depositing a paycheck or showing up to sign closing documents on their home. 

When difficulties with payment have arisen these families have turned to their “lenders” (if they can find them) for help – only to find, that as has been widely documented, there is little help there.

The one resource to which they can turn, with confidence, are the HUD-Approved Housing Counseling Agencies, from local and state government entities to non-profit community specific NGOs.  These agencies have supported more than 413,000 homeowners with services to ensure their financial stability, and worked to prevent mortgage delinquency for more than2l6 million households, successfully preventing nearly 900,000 foreclosures.  As important, these agencies strive to help buyers avoid mortgages that look good but will ultimate imperil their well-being.

The defunding of these counseling agencies is more that a ‘personal’ matter. While devastating to individuals and families, the foreclosure epidemic of the last five years has carved a swath of blight across scores of American cities and towns, leaving ugly scars of boarded up and abandoned buildings, lowering property values, harboring crime, and denying communities of needed population and revenues.

It is always less costly to prevent a problem rather than attempt to correct it. Rather than defunding housing counseling the prudent, ultimately cost saving action – for cities, towns as well as the federal government –  would be to expand both funding and powers of these counseling agencies so that they have the means to address a plague which threatens us all.

Dan Kildee is the President of Community Progress