HUD Budget Cuts Will Welcome Predators Back To Communities of Color

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by Yamila Ayad

Somebody pinch me please, because I feel like I’m having a bad dream.

In the shadow of the nation’s worst housing crisis, is it really possible that our nation’s lawmakers stripped away $88 million in funding for the HUD housing counseling services now available to the public?

Budget cuts are one thing — and necessary indeed to get the country back on track — but isn’t this cutting off our nose to spite our face? Seriously. Whatever figures you use — the latest research shows that the foreclosure crisis is far from over. An estimated 2.5 million foreclosures have occurred, with another 5.7 million forecasted to happen before its over.

In my local community of San Diego, entire neighborhoods have been decimated by the foreclosure crisis. Back in 2007, I founded a mobile foreclosure prevention counseling community service (Home Owners Mobile Education Clinic) because I couldn’t serve the volume of distressed homeowners coming to my office in need of counseling.

To date, the HOME Clinic has served about 9,000 families and has delivered help to distressed homeowners thanks to the help of local HUD counselors. I shudder to think about where these families would have turned had these services not been available.

With all the people we’ve helped through the program, there are still many desperate families who have fallen prey to the clever scam artists and their offers to help avoid foreclosure. At one point, our local district attorney reached out to the real estate community because of the epidemic of swindlers. Unconscionable acts of greed and opportunism.

But, guess what? Our elected officials have just opened the door of opportunity to these predators. In the absence of skilled housing counselors and legitimate services, the unscrupulous cast of characters will grow. And, guess who will be their best targets? People of color.

Seventeen percent of Latino homeowners are still at risk of foreclosure. The loss of wealth in our neighborhoods has been devastating. Where will our families turn for help now when they are fighting to hold on to their homes? Where will the next generation of new buyers turn for information on how to prepare for homeownership?

Think about the choices being made here by our lawmakers. How serious are we about fostering a housing recovery with decisions like this? How committed are we, as an industry and as a nation, to avoid repeating the same mistakes in the future? It would seem, not so much.

Certainly cutting away vital services that offer families guidance on homeownership, foreclosure and renting — hardly seems like a move forward. With these actions, we’re leaving our families to fend off the wolves at a time when they need us most.

Yamila Ayad

About the author:
Yamila Ayad is a San Diego-based mortgage lender and a former two-term national board member of NAHREP. She is the co-founder of the Home Owners Mobile Education clinic and the vice chair of the Housing Opportunities Collaborative. She serves on the board of the San Diego Foundation.

One Response to “HUD Budget Cuts Will Welcome Predators Back To Communities of Color”

  1. Kim Herman says:

    We couldn’t agree with you more! What a dumb cut to make while the crisis is still on-going. There wasn’t much thought about the impact on people when this was agreed to, Kim

  2. I agree wholeheartedly with Yamila. Rather than severely reducing the availability of housing counseling, Congress should be providing adequate funding to support housing counseling programs across the country, substantial portions of which should be allocated to fund effective foreclosure prevention efforts to distressed borrowers who qualify for viable loan modification programs.

    The National Foreclosure Mitigation Counseling Program, for example, has cured the loans of 55% of its clients within 12 months after their loans had entered foreclosure, compared to only 38% of those who did not receive such counseling. Indeed, housing counseling is particularly important to minority communities who otherwise face indelible barriers to homeownership, including language barriers, lack of traditional credit histories, the threat of ubiquitous predatory lenders, and lack of thorough and clear information on the buying and proper financing of a home. Without such counseling, minority communities will be unable to achieve sustainable homeownership, and their accumulation of wealth and economic progress will be substantially curtailed.

    I applaud Yamila for assertively standing up to these highly insensitive and thoughtless Congressional actions, which are promulgated on the basis that they are looking after the welfare of future generations of Americans. But how can we do that, when we seriously jeopardize this current generation of Americans on whose economic prosperity and advancement all Americans in the future will depend upon?

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