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Murray, Schumer, Brown And Casey Succeed In Adding $80 Million For Mortgage Counseling To Senate-Passed Housing Bill

Apr 10 2008

Amendment Brings Total Assistance For Housing Non-Profits to $180 Million, Matching Level In Omnibus Spending Bill Earlier This Year

Funds Will Be Distributed To Nonprofit Housing Groups at the Front Lines of Helping Homeowners Avoid Foreclosure

Washington, D.C. –  U.S. Senators Patty Murray (D-WA), Charles E. Schumer (D-NY), Sherrod Brown (D-OH) and Robert Casey (D-PA) announced Thursday they successfully inserted an additional $80 million in mortgage counseling funds into the housing bill approved by the full Senate today.  
 
Despite an effort by Senate Republicans to block additional funds, the senators' efforts means the bill will now provide a total of $180 million in assistance for non-profits specializing in foreclosure prevention. That matches the level of funding the same senators secured in the omnibus spending bill earlier this year. The funding, which includes $30 million in legal aid championed by Sen. Barbara Mikulski (D-MD), will help address the plight of the estimated two million families at risk of losing their homes to foreclosure over the next two years as their risky subprime loans reset to higher, unaffordable rates. 
 
"Mortgage counseling works and has helped keep struggling families around the country in their homes," said Senator Murray. "This added funding will ensure that more Americans can breathe a sigh of relief knowing that help in preventing foreclosure is just a phone call away."

“Restoring this funding for mortgage counseling improves this housing bill by leaps and bounds,"  said Senator Schumer. "No step we can take to address the housing crisis gets more bang for the buck than bolstering mortgage counselors, who succeed in staving off a foreclosure 96 percent of the time."   
 
"Housing counseling can help thousands of families stuck in bad subprime loans," said Senator Brown. "These are not speculators, but struggling families who need some help to keep them in their homes. Housing counseling is proven, it works, and this additional funding will make a difference."
 
“This money will help families who are struggling to stay in their homes and keep neighborhoods intact across country,” said Casey.  “We know that housing counseling makes a difference in the lives of many families and will help our economy to start to recover.”

Counseling programs have a demonstrated track record in helping homeowners navigate the complicated process of contacting lenders, banks and legal services to modify their mortgage loans and ultimately save their homes from foreclosure.  Counseling has proven to be one of the most successful and cost-effective ways of avoiding foreclosure, with a 96% foreclosure avoidance success rate.  Foreclosure prevention counseling can cost $1,000 to $1,500 per household assisted, according to counseling groups. Conversely, the Joint Economic Committee of Congress has estimated that a typical foreclosure can cost up to $227,000.