This morning Secretary Donovan testified before the Senate Banking Committee about HUD’s FY12 budget request. In both his testimony and during the Question and Answer portion of the hearing, Secretary Donovan strongly supported restoring funding for the Housing Counseling program.
In his oral testimony, the Secretary referenced the cuts to the HUD Counseling Program by calling the cuts particularly painful and calling for restoring the counseling funding. He said that restoring the funds reflects the need for core investments to our economic situation.
During the Q and A, one of the first questions Chairman Johnson (D-SD) asked Secretary Donovan was about the cuts to the counseling program. He asked the Secretary if funding for counseling is still an important use of federal funds. The Secretary responded by saying “Absolutely.” He said that counseling has always had a benefit and even more so during a crisis. He cited the Urban Institute study that concluded individuals counseled are 70% less likely to be foreclosed upon (He did not mention the study looked at NFMC). He also indicated there are other studies that demonstrate counseled homeowners are more successful in the purchase of their homes and making payments. The Secretary also addressed those who may think counseling is getting sufficient funding because NFMC exists and was spared cuts. The Secretary told the Committee the key point to remember is that NFMC only meets a portion of the needs and ignores many of the other types of assistance needed by homeowners, mentioning the impact on seniors who wish to pursue a reverse mortgage. The Secretary concluded his answer to Chairman Johnson’s question by saying that “It is absolutely critical to restart this program.”