In prepared testimony delivered by Acting Federal Housing Administration Commissioner Carol Galante, Galante urged a House Financial Services subcommittee to consider the importance of housing counseling and funding restoration—including reverse mortgage counseling—in the context of the greater housing crisis.
“Housing counselors are a crucial source of assistance for distressed homeowners,” Galante stated in testimony before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, noting the thousands of reverse mortgage borrowers who received housing counseling in fiscal year 2011.
“Distressed homeowners working with a counselor are nearly twice as likely to receive a mortgage modification,” Galante said. Additionally, she cited National Foreclosure Mitigation Counseling Program findings that that borrowers in foreclosure were 70% more likely to get up to date on payments if they received counseling.
Despite the loss of funding for housing counseling in fiscal year 2012, Galante said HUD is working to address concerns and enhance speed and accountability.
Through a plan to streamline the process and reduce the time frame for funds to be received by counseling agencies to no more than 180 days, HUD has made strides toward using funds in the same fiscal year that they are appropriated.
Additional improvements include earlier publication of the housing counseling NOFA; streamlined application for high-performing agencies, shorter timeline for obligation of grants, and other changes.
View the full testimony.
Written by Elizabeth Ecker