September 20, 2011

The Honorable Daniel Inouye Chairman Senate Committee on Appropriations S. 128, The Capitol Washington, DC 20510

The Honorable Thad Cochran Ranking Member Senate Committee on Appropriations S. 128, The Capitol Washington, DC 20510

Dear Chairman Inouye and Ranking Member Cochran, On behalf of the Mortgage Bankers Association1 (MBA), I am writing to express MBAs support for the Department of Housing and Urban Development (HUD) housing counseling program. HUDs housing counseling program was created by Congress in 1968 as part of the Housing and Urban Development Act. That law authorizes the HUD secretary to provide or contract with organizations to provide counseling services to tenants and homeowners. This law also created the housing counseling grant program, which last year awarded $78 million in grants to approved housing counseling agencies and an additional $5 million to train HUD-approved housing counselors. Because of the great work facilitated by this program, we ask your support for HUDs request for $88 million in housing counseling funds for FY2012. While we understand that the Transportation, Housing and Urban Development Subcommittee did not approve HUDs full request, 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. Last year, Congress chose not to satisfy HUDs request and, while HUD had the funds to support agencies through 2011, without funds for 2012, these agencies will have to lay off staff, cut services and raise prices. The need for housing counseling has probably never been greater than during this recent economic downturn. With foreclosure rates of single and multifamily properties at all-time highs, individuals have turned to HUD-approved counseling agencies to assist them in modifying their
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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., MBA invests in communities across the nation by ensuring the continued strength of the nation's residential and commercial real estate markets; expanding homeownership and extending access to affordable housing to all Americans and supporting financial literacy efforts. The MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. We have over 2,400 member companies, including all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, life insurance companies and others in the mortgage lending field. For additional information, visit MBAs Web site: www.mortgagebankers.org.

1717 Rhode Island Ave, NW | Washington, DC 20036 | www.mortgagebankers.org | (202) 557-2700

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mortgages, finding alternatives to foreclosure and seeking rental housing. This demand is on top of the traditional demand for services such as pre-purchase counseling and counseling for FHAs reverse mortgage program, the Home Equity Conversion Mortgage (HECM). Although the funding cut hurts all borrowers, seniors are particularly impacted because Congress mandated that reverse mortgage counseling was a requirement for receiving a HECM. Because FHA policy bars lenders from paying for reverse mortgage counseling (to eliminate any conflict of interest), the reverse mortgage counseling fee becomes the borrowers responsibility. The result will be that seniors who need the proceeds of a reverse mortgage the most will be the ones least likely to afford the counseling fee. Eliminating funding for counseling is a set-back for seniors who are trying to maintain a decent standard of living in these tough economic times. HUD-approved housing counseling agencies represent the gold standard in their industry. Approval means they have met the rigorous requirements set out by HUD to ensure consumers have access to detailed and thorough homeownership, rental, reverse mortgage and default counseling. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, HUD is now required to certify individual housing counselors. This effort will require additional resources for a Department whose mission has been tested in recent years. MBA stands ready to help HUD in this endeavor and also looks to Congress to provide support to HUD in meeting this mandate. MBA sincerely hopes that Congress will reinstate these funds in FY2012 so that all Americans can continue to access these services. If you have any questions, please contact me at 202557-2736 or bkillmer@mortgagebankers.org.

Sincerely,

William P. Killmer Senior Vice President of Legislative and Political Affairs Mortgage Bankers Association