This seems a bit
bone-headed.
The recent budget deal struck between Republicans and Democrats would slash funding for housing counseling, a move that advocates say would force counseling agencies to lay off staff amid the foreclosure crisis.
One of the primary sources of money for counseling agencies is a program administered by the U.S. Department of Housing and Urban Development. The budget agreement would reduce that program's funding from $88 million to zero. The effect on agencies would be "absolutely devastating," said Judy Hunter of the Rural Community Assistance Corporation, a non-profit based in Sacramento, Calif....
Counseling agencies offer traditional services such as financial reviews and budgeting, but they also increasingly have been called upon to help homeowners navigate the often-bewildering maze they face when trying to avoid foreclosure. The Treasury Department has relied on the infrastructure of agencies in running the administration's mortgage modification program, referring homeowners to HUD-approved counselors through a national hotline.
The cuts would go into effect later this year. Agencies could seek other private or public funds to try to avoid layoffs, but some are already scrambling to make ends meet, advocates said. "What we're seeing across the market is that both on the foreclosure front as well as with first-time homebuyers, funds to support housing counseling agencies are drying up," said Bernell Grier, chief executive officer of Neighborhood Housing Services of New York City.
According to HUD, about half of the counseling sessions provided in the program in 2010 were with homeowners facing foreclosure. About a quarter of all mortgages are now underwater, so if anything, the need for housing counseling services is going to grow.
Another lamb sacrificed to the gods of austerity: a chunk of the U.S. housing market.
