The Department of Housing and Urban Development granted $42 million in housing counseling funds within three months.
HUD Secretary Shaun Donovan said in a conference call with reporters Friday the department cut the usual timeline by 70%.
Congress eliminated $88 million in the 2011 federal budget that was supposed to be used for HUD-approved counselors. The department along with nonprofits and industry trade groups pushed to get roughly half of the funds restored in a HUD appropriations bill. HUD began distributing the funds through grants in December.
HUD was quick to grant the money to more than 468 organizations to use mainly for foreclosure prevention work.
Donovan said nine in 10 struggling homeowners that received the counseling continue to live in the home 18 months later and are twice as likely to receive a modification.
“We fought hard to persuade Congress to restore funding for housing counseling in HUD’s budget and now we’re working to make these important resources available as quickly as possible,” Donovan said.
More money could soon come from the $25 billion foreclosure settlement filed in court this week with the five largest mortgage servicers. Of that, Donovan said $3 billion will go to the states to use for foreclosure prevention work, which could include housing counseling.
So far, Illinois Attorney General Lisa Madigan and Indiana AG Greg Zoeller are developing housing counseling plans using the money.
“Needs and requirements vary from state to state, but we are encouraging all AGs to follow their lead,” Donovan said.
