Bad news was brewing as Illinois NCRC members flew in to DC on Wednesday morning. Details of the final FY 2011 budget compromise were made public in the form of H.R. 1473, and advocates noticed a scary line item:
“The level for ‘Department of Housing and Urban Development, Housing Programs, Housing Counseling Assistance’ shall be $0.”
As word spread throughout the conference, advocates collectively shook their heads in disbelief as counselors from NCRC’s extensive housing counseling network called their boards in a panic, trying to figure out what the cuts would mean for their staff and clients. It seemed like insanity: at a time when foreclosures are continuing to rise at a healthy clip and more and more families need help to manage the gargantuan task of avoiding foreclosure, why would you drastically cut funding for the very organizations that have proven to be effective at providing those services?
The next morning, we took that message to our Illinois legislators. Counselors told compelling stories of families they’ve helped to save their homes and told policymakers they would have to lay off staff and turn away potential clients in response to the cuts. Many legislators seemed to understand the value of housing counseling agencies and committed to working to reinstate the funding in the FY 2012 budget; others needed more education on the issue. Sadly, H.R. 1473 has been signed into law last week without funding for counseling. We also discussed the need to ensure that reforms to the housing finance system would not drastically limit communities of color’s access to credit, include principal writedown components to loan modification programs, and oppose legislation aimed at weakening the Consumer Financial Protection Bureau.
After the Hill visits, the conference’s workshops provided an opportunity to learn more about new trends and dig deeper into pressing topics. Richard Cordray, the Director of Enforcement at the Consumer Financial Protection Bureau, spoke about how the agency would close gaps in oversight that led to systemic failure in the financial system and provide more information to the public about industry trends and emerging practices. He stressed that the CFPB needed a non-politicized funding stream in order to adequately address these challenges, not one that is subject to the pressures of industry lobbyists.
A panel on aging in place described the costs and benefits of reverse mortgages, including how they could strip seniors’ homes of equity and even result in foreclosure. Reverse mortgages are relatively new loan products for individuals older than 62 that release a home’s equity in regular payments or one lump sum. Payments can be used for any purpose, including paying a conventional mortgage, making home repairs, or for extra spending money. Barb Stucki of the National Council on Aging said that more and more seniors are facing poverty and looking to their homes as a source of financial security, since home equity often exceeds the amount of personal savings. However, Stucki pointed out that counseling is critically important before taking out a reverse mortgage, since there are many opportunities for deception. Brenda Grauer, formerly of the Illinois Attorney General’s office, showed some examples of that deception, with advertising materials steering borrowers to higher-cost programs and portraying reverse mortgages as a government-administered lending program (they are FHA-insured but private lenders arrange the loans). The panel demonstrated another example of a constituency that will be hurt by the loss of housing counseling capacity.
Other panels focused on strategies to best generate and harness support for community investment issues. A workshop on faith-based organizing taught participants how to understand and approach religious institutions’ power structures and demonstrated how the faith community could lend a powerful moral voice to community investment campaigns. Communications strategists told participants in another workshop that, in an age of short attention spans, well-executed and authentic values-based appeals will cut through the cynicism.
Although Illinois NCRC members were greeted with shocking bad news upon their arrival, the tools and legislative advocacy opportunities at the conference gave participants the ability to make their voices heard at a crucial moment. And, well, it’s always nice to be reminded that you’re not going it alone—there is a strong and growing network supporting community investment. Kudos to NCRC for another great year!