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HUD Housing Counseling

Anyone requiring HUD housing counseling should jump in now before budget cuts obliterate the program later this year. Remember the looming government shutdown in early April? Well, the Republicans and Democrats decided one way to balance the budget was to slash HUD funding for counseling services that have helped thousands of homeowners avoid foreclosure.

I've referred many people to HUD housing counseling. Especially, those participating in Obama's Making Home Affordable program. MHA originated in 2009 as a way to help "millions" of homeowners stay in their home via loan modification. The program hasn't been very successful and is likely to be scraped as well.

I'm all for government budget cuts, but can't help but wonder why housing counseling would be nixed in the midst of a foreclosure nightmare. Anyone who had undergone the foreclosure process will tell you it's an unpleasant experience. The endless sea of paperwork can be difficult for a lawyer to understand, let alone a layperson.

HUD housing counselors have been instrumental in helping homeowners submit required documents for Making Home Affordable loan modification and foreclosure alternatives programs. They have also helped many seniors obtain required counseling when entering into reverse mortgages.

Other services offered through HUD include: first time home buyer counseling, rental assistance, and affordable housing locator services. As Americans continue to suffer from long-term unemployment and staggering levels of foreclosure, many depend on help to locate suitable housing.

A report published by the Department of Housing and Urban Development in 2009 states, "In 2006, 93-percent of all Federal Housing Administration (FHA) borrowers in default who completed housing counseling services successfully avoid foreclosure."

If only 7-percent of homeowners lose their property, wouldn't it be more budget-conscious to fund programs that stimulate the economy instead of placing a heavier burden on taxpayers? We're not talking about having the counseling budget reduced. The entire $88 million budget was erased.

A big concern is that losing counseling services will lead to more consumer fraud in the guise of foreclosure prevention scams. It will only be a matter of time before the Feds need a task force to investigate this crime. Chances are it will cost millions, just as it's costing right now to investigate mortgage fraud.

As far as I know, the Neighbor Works America program will remain intact. This government program only offers housing counseling focused on foreclosure prevention to first time home buyers.

Their website directs visitors to contact HUD housing counselors if facing foreclosure. In fact, numerous government websites direct homeowners to HUD. When counseling no longer exists, these websites will require updated content at taxpayers' expense.

Budget cuts are expected to occur in the last quarter of 2011. Those who need help should reach out now. We can only anticipate that without help from counselors many more foreclosures will occur and cause property values to decline further.

Losing HUD housing counseling could have serious consequences. Only time will tell how it all shakes out. One thing is certain, the market is very uncertain. If you'd like to keep a close eye on current events take a moment and subscribe to our mailing list and peruse our article library packed with hundreds of informative real estate and personal finance articles.


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Published on May 11, 2011 at 03:20 AM | Comments: 1

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Comments

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Pablo Gibson | May 21, 2011 2:28 AM

 

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