The Mortgage Bankers Association asked lawmakers to reinstall funding cut from the Department of Housing and Urban Development counselor program earlier in the year. Congress cut all $88 million in HUD nonprofit counseling funds appropriated for the department’s fiscal 2012 as part of the federal budget negotiations. Earlier in September, HUD granted $10 million in counselor funds to nonprofits from money that wasn’t spent the prior year. On Wednesday, the Senate Appropriations Committee approved a bill to provide vital funding for the Federal Housing Administration multifamily programs and contains $125 million for housing counselor efforts. Of that $60 million would be restored for the HUD counselors. The bill must merge with a sister package currently in the House. William Kilmer, senior vice president of the MBA, wrote a letter to the two ranking members of the Senate Appropriations Committee seeking to reinstate the full $88 million. “HUD housing counseling grant funds are critical to our efforts to assist homeowners facing foreclosure, help first-time homebuyers navigate the challenges of the purchase process and educate seniors — a traditionally high-risk group for financial fraud — considering reverse mortgages,” Kilmer wrote. Without the funding, HUD may be forced to layoff staff, cut services and raise prices for counseling. Last week, Deborah Holston, acting deputy assistant secretary for single-family housing at HUD, asked a House subcommittee to restore the funding. Some Republicans seemed eager to do so. But approving renewed government spending will prove challenging. Late Thursday, the House voted for a bill that would keep the Federal Emergency Management Agency running while cutting roughly $1 billion elsewhere. The Senate voted down the bill Tuesday, citing the cuts included in the bill were too much. The familiar impasse may lead to a government shut down next week. Still, Kilmer said reinstalling the counseling funds should be a priority, especially for cash-strapped seniors, who would face having to pay counseling fees for reverse mortgages. “The need for housing counseling has probably never been greater than during this recent economic downturn,” Kilmer wrote. Write to Jon Prior. Follow him on Twitter @JonAPrior.