We all know how important housing counseling is for the reverse mortgage industry and for the seniors who could benefit from the service. It clearly helps educate consumers and assists in making an informed decision about the use of the product. In statistical terms, we know that counseling works. Just this May, HUD released survey results indicating housing counseling helped 69 percent of Americans facing foreclosure resolve their issues, with 56 percent of those counseled able to become current on their mortgages.
In June, the collective efforts of CIS, NRMLA and others have helped to secure funding for housing counseling for fiscal year 2013 in both the U.S. Senate and, just recently, the House of Representatives. The House subcommittee included $45 million for housing counseling in its appropriations bill, and the Senate Transportation, Housing and Urban Development (THUD) subcommittee passed an appropriations bill that included $55 million for housing counseling.
Chairman Tom Latham (R-IA) of the THUD Subcommittee on Appropriations has been a proponent of housing counseling, particularly for consumers looking at the HECM program. CIS has worked closely with Chairman Latham and his committee staff for the last three years to promote the need for more funding.
He and his staff have encouraged CIS and others to increase awareness and garner support for the bill from the House Financial Services Committee in order to make the inclusion of counseling funds more likely in the FY 2013 appropriations markup.
The funding for housing counseling will likely stay the course during the full committee appropriations process in both chambers as the House and Senate negotiate the final number for housing counseling during conference proceedings. According to CIS sources on Capitol Hill, the final number will likely result in a $50 million compromise. The portion set aside for HECM housing counseling by HUD has historically been 10 percent of the total dollar amount proposed, meaning we can probably count on $5 million for HECM housing counseling for FY 2013.
Government funding for the program is no doubt essential to the health of the housing market in general and the reverse space in particular. HUD Secretary Shaun Donovan spoke at the Leadership Council of Aging Organizations (LCAO) meeting just one day prior to the markup, emphasizing the importance of funding for HUD housing counseling, as it is the only pot of money that goes directly to the HECM program. He urged everyone in the Aging community to make the case to Congress for this vital funding.
Still, it’s important to keep in mind that this funding is not a sure thing by any means. Last year, Chairman Latham and several of his colleagues took issue with some of the forward mortgage counseling programs during the subcommittee markup for FY 2012. Latham felt compelled to zero out funding for all housing counseling, including funds for the HECM. Fortunately, CIS was able to restore the funding for FY 2012, but not without a challenge.
We hope that FY2013 will include the necessary funds to support the need for HECM counseling so that seniors can continue to benefit from the program. So far, funding for the program looks promising. The industry must thank the following members of Congress for their continued support of this mission:
SENATOR PATTY MURRAY (D-WA)-
SENATOR SUSAN COLLINS (R-ME) - Ranking Member of the Subcommittee on Appropriations for Transportation, Housing & Urban Development
SENATOR BOB MENENDEZ (D-NJ) - Chairman of the Subcommittee on Housing, Transportation and Community Development
SENATOR MIKE CRAPO (R-ID) - Senior Member of the Subcommittee on Housing, Transportation and Community Development
U.S. HOUSE OF REPRESENTATIVES
REP. TOM LATHAM (R-IA) - Chairman of the Subcommittee on Appropriations for Transportation, Housing & Urban Development
REP. JOHN OLVER (D-MA) - Ranking Member of the Subcommittee on Appropriations for Transportation, Housing & Urban Development
REP. JUDY BIGGERT (R-IL) - Chairwoman of the Insurance, Housing & Community Opportunity Subcommittee
REP. LUIS GUTIERREZ (D-IL) -Ranking Member of the Insurance, Housing & Community Opportunity Subcommittee