Housing Counseling in Danger: They Say Cut Backs, We Say ??

Posted by Miriam Axel-Lute on April 13, 2011

Housing counseling works. Counselors form a critical bridge between servicers and homeowners in distress, advocating for them in the face of perverse servicer incentives, lost paperwork, and unclear outcomes, and helping them navigate a modification system that Sen. Jeff Merkley of Oregon (pictured) described yesterday, in the case of HAMP, as “absolute hell” and impossible to make worse even if you were trying to design a system to maximize stress for homeowners.

But it seems in the current atmosphere of making working people pay for crises caused by recklessness on the part of financiers and those supposed to be regulating them, that not only funding for neighborhood stabilization and mortgage modification, but even for counselors is seen as expendable.

John Taylor, executive director of the National Community Reinvestment Coalition, and Sen. Merkley, in their opening remarks for NCRC’s annual conference today (which Shelterforce will be covering throughout the next few days on Twitter, Facebook, and here on Rooflines), both decried the federal budget cuts to housing counseling programs that were announced this week. $88 million — the entire FY10 appropriation for Housing Counseling Assistance — is slated to be cut from in the April 8 FY11 proposal.

At the New America Foundation’s event yesterday on mitigating the effects of the foreclosure crisis, Wade Henderson, of the Leadership Conference on Civil and Human Rights, responding to a question about how organizations will be able to continue to save homes with the counseling funding cut, issued a clarion call to the housing and civil rights community to fight back against these cuts rather than accept them. ‘The idea that housing counselors can be cut and we would roll over is disturbing to me,’ he said. ‘They should get greater authority.’ Henderson called for a pushback of the sort that Planned Parenthood organized on behalf of saving funding for women’s healthcare. “Don’t set the Senate up to be a firewall. They will cave. You be the firewall.”

He’s undoubtedly right, even though the news from New York state is not encouraging. A coalition of 14 community development and legal services organizations got together to push to keep the state’s Foreclosure Prevention Services Program alive, and got the Assembly to include funding for it in the state budget.

But Gov. Cuomo, a former HUD secretary, vetoed the funding, calling it a “new appropriation” mischaracterized as a reappropriation of which he therefore “disapproved.” The four-year-old program used federal stimulus dollars for its last year of funding.

Is it just me, or is it a bit ironic that an effective, collaborative program should be punished by a budget-conscious governor for not using state dollars last year when there was an opportunity to make use of federal dollars?

Not to mention, of course, that using a technicality like that to dismantle a functional foreclosure-prevention program when we know that servicer-driven foreclosure, dual track foreclosure and modification, and related snafus/fraud are rampant is even worse.

Mike Hickey, executive director of the Center for NYC Neighborhoods, which has been working hard to coordinate counseling and legal services in New York City, said the decision “not only flies in the face of our state’s economic development strategy, it sends a terrible message to the 80,000 homeowners fighting foreclosure in New York State: you’re on your own.”

New Yorkers disappointed with this might agree with Janis Bowdler of the National Council of La Raza, which co-sponsored yesterday’s foreclosure mitigation panels, when she raised burnout as a major concern. Many counselors are themselves facing foreclosure as a result of reduced hours or other family members losing jobs, she said, and there are so many related crises and budget battles going on. How do we rally constituencies who are currently overwhelmed and get the foreclosure crisis back on the national agenda?

Photo credit: RH Photos Charles Matthews and Dave Patterson

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Miriam Axel-Lute is editor of Shelterforce and associate director of the National Housing Institute. Her email is miriam at nhi dot org.

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