New York, NY- For homeowners facing foreclosure housing counseling can be a blessing and allow them to save their homes, but federal funds for the service are running out.
HUD runs the counseling program and provides services for free or for a low income based rate. The House recently passed a bill which cut HUD funding by $10 million and now faces a veto threat from President Obama. The Administration is urging states to help bridge the gaps in housing counseling funding by using their allotment of the national foreclosure settlement.
Many states however are using the funds to make up shortfalls in their own budgets instead of helping struggling homeowners, who could benefit greatly from counseling and is becoming increasingly important as foreclosures are starting to tick up.
Recent studies have shown that counseling is effective in preventing foreclosure. In a December of 2011 study, the Urban Housing Institute found that 17 percent of troubled homeowners were able avert foreclosure through loan modifications and other alternatives with the help of a counselor. Homeowners who don’t utilize counseling avoid foreclosure only 9 percent of the time. A HUD commissioned study showed similar results.
Although, a recent study from the Atlanta Federal Reserve showed that foreclosures in 15 metropolitan areas only lowered home prices by 1 percent, preventing foreclosure still benefits communities by offering stability. Foreclosure attorneys and housing counselors can help homeowners stay in the home that means everything to them.