Federal Funds To Prop Up Foreclosure Counseling

Posted in Foreclosure, March 11th, 2008 |

Responding to the unprecedented foreclosure crisis federal funds have been sanctioned to give support to the counseling agencies. Florida will make use of $1.3 million for this purpose. The grant will be distributed among 50 counseling bodies.

The Governor, Charlie Crist is said that this one simple step will go a long way in alleviating the crisis. It will open communication lines between lenders and borrowers – something that is lacking today. It is a known fact that most of the lenders do not contact the lenders even though foreclosures are knocking on their doors. Counseling will provide for more awareness and financial education. The sufferers will know that there are many alternatives to choose from. Foreclosures are not always inevitable.

The grant emanates from the National Foreclosure Mitigation Counseling Programme. The amount is more than double of that which had been sanctioned in 2006. It is expected that nearly 25,000 house owners cowering under the threat of foreclosures will benefit from it.
Recently Crist had organized a task force including representatives from the mortgage and banking industries to work with consumer advocates for the purpose of compiling an in-depth study of the foreclosure issue. It is expected that shortly after the middle of April the body will submit its findings and related suggestions.

The foreclosure crisis is no longer confined to the lender borrower zone – it has spilled over to cloud the entire socio-economic structure of the nation. There are strong rumours about recession as stocks tumble and unemployment rises. The lenders are weighed down with too many properties that do not fetch money but rather take out money as the foreclosure is a time and money consuming process. Too many houses for sale means prices of neighbouring houses are also falling making it a buyer’s paradise. But from where will the buyers get the required loan to buy houses? The mortgage companies facing a cash crunch are in position to advance loans. The housing industry is in the doldrums and this is having a chain effect. Abandoned houses are attracting criminals and prostitutes. Efforts are being made at the local, state and national level to solve the problem. Community representatives are pitching in but it requires a lot of tight rope walking. The powerful lending bodies cannot be alienated without touching basic principles. On the other hand disgruntled vote banks are dangerous for politicians and their power games.