By Janet Murguía, President & CEO, NCLR, Marc Morial, President, National Urban League, and Lisa Hasegawa, Executive Director, National Coalition for Asian Pacific American Community Development
In this era of budget slashing, some cuts just don't make sense, particularly when they push families further away from achieving the American Dream of homeownership and threaten our nation's economic and job stability. A primary example of this is when Congress eliminated $88 million to fund the U.S. Department of Housing and Urban Development's (HUD) Housing Counseling Program, which advises and educates people about first-time homeownership, mortgages, and foreclosure prevention. This essential program is fundamental to keeping people out of poverty, and providing protection to homeowners, particularly those in communities of color.
The Housing Counseling Program is a critical lifeline for future homeowners and Americans facing foreclosure, assisting more than 11 million households since 2006 and ensuring that families keep a roof over their heads. In 2010 alone, HUD invested $75 million in the program, which was leveraged to create jobs, preserve home values, and prevent foreclosures, resulting in nearly $29 billion in measurable economic benefit. Despite the program's success in making positive economic gains, Congress eliminated HUD funding for organizations that provide housing counseling assistance.
Now, the millions of Americans left without any guidance are more vulnerable to predatory practices. Research shows that borrowers who receive counseling before they buy a home are less likely to default, and, according to a recent study by The Urban Institute, homeowners who work with counselors--such as those employed with HUD funding--are less likely to default on their mortgage and more likely to get a modification on their loan that enables them to keep their home.
At a time when the housing market is still in a shambles and HUD funding cuts threaten counselors' jobs, nonprofit organizations are coming together to preserve the housing counseling infrastructure. The Alliance for Stabilizing Our Communities (ASOC), a partnership between the National Council of La Raza (NCLR), the National Urban League (NUL), and the National Coalition for Asian Pacific American Community Development (National CAPACD), is working to replace the eliminated HUD money, ensuring that their communities don't fall behind, and creating innovations toward a sustainable future for housing counseling.
In 2009, Bank of America helped seed ASOC's creation by providing start-up funds for the multiethnic collaboration. With the HUD funding crisis hitting hard in communities around the country, additional investment is required. Recently, the Open Society Foundations (OSF) gave emergency funding of $500,000 to ASOC to avert the layoff of hundreds of local housing counselors. OSF issued a challenge to other philanthropic partners and financial institutions to support ASOC and other organizations that have lost HUD funding. Wells Fargo has already met this challenge, recently announcing $1.25 million in grants to nonprofits that are trying to save housing counselors' jobs and provide access to reliable, independent sources of information in vulnerable communities across the country.
This support is a good start toward preserving vital counseling services, but the housing market has not yet rebounded, and our country can't afford to put more people out of work. Groups like ASOC will help America's growing minority communities keep their homes, reduce mortgage delinquencies, and assist in rebuilding our country's wealth. Our proposal aligns with the President's call for investments in housing and neighborhoods. Congress missed a key opportunity to demonstrate leadership in this time of economic crisis when a House Appropriations subcommittee passed the HUD budget without a single dollar for the counseling program. Such inaction runs the risk of putting American families in even greater financial trouble.