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Bush Administration Announces $50 Million In Housing Counseling Grants To Nearly 400 National, State And Local Agencies - HUD funding critical to foreclosure prevention WASHINGTON - Hundreds of thousands of American families will have a greater opportunity to find housing or keep the homes they have because of $50 million in housing counseling and counseling training grants announced today by U.S. Housing and Urban Development Secretary Steve Preston. Housing counseling grants will assist families in becoming first-time homeowners and remaining homeowners after their purchase. HUD-approved counseling agencies not only provide homeownership counseling, but also offer financial literacy training to renters and homeless individuals and families. "These critical counseling grants not only help to put people into homes, but they help to keep them there as well," said Preston. "Housing counseling organizations will continue to help families make more informed choices before they purchase a home and counsel families facing foreclosure. Now, more than ever, it is critical that Americans better understand how to manage their money, navigate the homebuying process, and securing their financial future."
Since 2001, HUD has increased funding to 2,300 approved housing counseling agencies by 150 percent. More than $47 million will support 21 national and regional organizations and 376 state and local housing counseling agencies. In addition, HUD is awarding $3 million to two national organizations to train approximately 2,600 counselors who will receive the instruction and certification necessary to effectively assist families with their housing needs. National and regional agencies distribute much of HUD's housing counseling grant funding to community-based grassroots organizations that provide advice and guidance to low- and moderate-income families seeking to improve their housing conditions. In addition, these larger organizations help improve the quality of housing counseling services and enhance coordination among other counseling providers. Counseling agencies will use $4 million to help assist senior citizens seeking reverse mortgages or Home Equity Conversion Mortgages (HECM). These agencies will provide counseling for the rapidly growing number of elderly homeowners who seek to convert equity in their homes into income that can be used to pay for home improvements, medical costs, and other living expenses. The organizations that provide housing counseling services help people become or remain homeowners or find rental housing, and assist homeless persons in finding the transitional housing they need to move toward a permanent place to live. Grant recipients also help homebuyers and homeowners realistically evaluate their readiness for a home purchase, understand their financing and downpayment options, and navigate what can be an extremely confusing and difficult process. In addition, grantees help combat predatory lending by helping unwary borrowers avoid unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure. Likewise, foreclosure prevention counseling helps homeowners facing delinquency or default employ strategies, including expense reduction, negotiation with lenders and loan servicers, and loss mitigation, to avoid foreclosure. With foreclosures on the rise nationwide, these services are more important than ever. HUD awards annual grants under the housing counseling program through a competitive process. Organizations that apply for grants must be HUD-approved and are subject to biennial performance reviews to maintain their HUD-approved status.
Topics Announced For 16th Mid-Winter Conference! Our next conference will be January 21-23, 2009 ON SOUTH BEACH in Sunny Miami, Florida! The schedule includes presentations by NCCUSL on the Uniform Debt Management Services Act, Options for Housing Renegotiations by a HOPE Now Representative, a presentation on the Debt Settlement Industry as it relates to Credit Counseling, and the Debt Collection Rights of Consumers, as well as our very popular small breakout sessions with 6-8 different creditors-you don't want to miss a thing! Registration forms will be available on our website soon. For Hotel Reservations, contact The Palms South Beach at 800-550-0505 and ask for the AICCCA block of rooms for the reduced rate of $209 single/double. Press Release (October 1, 2008) HUD Prohibits Lender-Paid Counseling (Sept. 29, 2008) This Mortgagee Letter informs Federal Housing Administration (FHA) approved Mortgagees and Department of Housing and Urban Development (HUD) approved housing counseling agencies that mortgagees are no longer permitted to pay for HECM counseling on behalf of mortgagors. This new statutory requirement is effective immediately. This ML rescinds paragraph (2) of the section entitled Payment of Counseling Fee in ML 2008-12. Section 2122 of the "Housing and Economic Recovery Act of 2008" (HERA) (Pub. L. No. 110-289), enacted July 30, 2008, requires that the HECM mortgage must be executed by a mortgagor who received adequate counseling from an independent third party that is not either directly or indirectly associated or compensated by a party involved in 1) originating or servicing the mortgage; 2) funding the loan underlying the mortgage; or 3) the sale of annuities, investments, long-term care insurance, or any other type of financial or insurance product. No Permissible Method for Payments Funding for Other Housing Counseling Services As required by section 214.303(g) of the Housing Counseling regulations, these transactions and relationships, as well as any other financial relationship between the counseling agency and any industry participant, must be disclosed to the counseling recipient. Press Release (October 2, 2008) National Reverse Mortgage Lenders Association (NRMLA) WASHINGTON, DC - The National Reverse Mortgage Lenders Association announced today that the Department of Housing and Urban Development (HUD) approved a single national loan limit of $417,000 for federally insured Home Equity Conversion Mortgage (HECM) reverse mortgages. The new, higher lending limit will enable borrowers to obtain a substantially greater benefit from their homes, if their home value is higher the previous HUD limit. Previously, the HECM program assigned different lending limits by county ranging from $200,160 in rural areas to $362,790 in the highest home value areas. Similarly, existing borrowers whose home value is greater than the new HUD limit may be able to increase their benefit by refinancing their reverse mortgage and are encouraged to contact their lenders. To identify a reputable lender, Consumer Reports, in its October 2008 Money issue, recommends that seniors contact NRMLA members, who are required to sign a code of conduct and follow best practices for the treatment and counseling of seniors. NRMLA's consumer site at www.reversemortgage.org provides users with a searchable database of NRMLA lenders in their local area. "HUD should be applauded for its expedient implementation of the single national loan limit for the HECM program, especially during such a tumultuous period," said Peter Bell, president of NRMLA. "The higher single national loan limit and other provisions expected to be implemented in the coming months make reverse mortgages a more viable retirement financial option for a broader audience who can receive higher benefits at lower origination fees than ever before." HUD is aiming for an effective date of November 1st, however the exact date will not be finalized until HUD issues a mortgagee letter on the new loan limit. A reverse mortgage is a unique loan that enables senior homeowners to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. Funds obtained from the reverse mortgage are tax-free. Borrowers can choose to receive the reverse mortgage funds as a lump sum, monthly income (for up to life), or line of credit, or as a combination of monthly income and line of credit. No mortgage payments are due during the life of the loan. Borrowers can use the funds anyway they wish - for home repairs and improvements, medical costs, in-home care, education, and supplemental retirement income. Borrowers make no monthly payments on a reverse mortgage during its term. The loan becomes repayable when the borrower sells the home or permanently moves out. In addition, the repayment amount can't exceed the value of the home. Reverse mortgages are originated largely by private lenders. The most popular is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration, an arm of the U.S. Department of Housing and Urban Development (HUD). More than 450,000 HECMs have been made since 1989. NRMLA is a nonprofit trade association, based in Washington, DC, whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners while educating both its members and consumers about the varied applications of this unique loan. Members sign a Code of Conduct pledging to abide by guidelines that assure fair, ethical, and respectful practices in offering and making reverse mortgages to seniors. Details on NRMLA, reverse mortgages, and a list of reverse mortgage lenders in each state are available on NRMLA's Web site, at http://www.reversemortgage.org. Public Relations News The AICCCA website was mentioned twice in a September 30 WI$EUP Teleconference Call presented by the U.S. Department of Labor, Women's Bureau. The topic of the call was, "Dealing with Debt and the Credit Crunch." MMI Financial Education Foundation President, Steve Bucci offered advice to the more than 425 participants on the call and recommended AICCCA members for those who needed help with budgeting and debt management. These unique calls are part of the U.S. Department of Labor, Women's Bureau's Wi$eUp project dedicated to helping workers reduce debt and increase savings and investments. A transcript of the call and audio recording can be found online at http://www.wiseupwomen.org. Permissible Nonpartisan 501(c)(3) and Partisan Campaign Contact on Voter Engagement/Protection Efforts May 501(c)(3) organizations engaged in nonpartisan election-protection efforts communicate with political parties and candidates who are also concerned about voting system integrity -- albeit from a more partisan perspective? Although 501(c)(3) organizations need to be careful not to violate the ban on intervention in political campaigns when communicating with parties and candidates, not all such communications are prohibited. This fact sheet offers some guidelines for when it's OK for a 501(c)(3) voter-protection group to talk with a candidate or party -- and when it's not. A 501(c)(3) organization must follow federal tax and federal and state election laws when engaged in any activity relating to candidate campaigns or political parties. That includes a 501(c)(3)'s efforts to protect the exercise of the right to vote, including research, advocacy, activism and administrative actions and litigation to ensure (a) fair and lawful rules and procedures for individuals seeking to register and vote, and (b) appropriate, sufficient and fairly distributed governmental information, voting systems and other resources to enable individuals to do so. Under federal tax law, 501(c)(3) organizations (whether or not they are incorporated) are strictly forbidden from supporting or opposing any candidate for public office. This means, among other things, that they may not endorse candidates for public office, make campaign contributions (whether monetary or in-kind), or make expenditures on behalf of candidates, political parties, federal PACs or nonfederal 527 organizations. Under federal election law, nonprofit corporations¹ (including incorporated 501(c)(3) groups), business corporations and unions are prohibited from making communications to the general public that expressly advocate for or against a federal candidate; contributing (cash or in-kind) to federal candidates; and coordinating certain communications with a federal candidate or political party. And, state election law routinely imposes similar restrictions as to state and local candidate campaigns. Virtually any violation of federal or state election law likely would be inconsistent with 501(c)(3) status as well. Under these rules, 501(c)(3) organizations may:
501(c)(3) organizations may not:
Even if these standards are satisfied, other groups or the media may raise questions about any 501(c)(3) engagement with a political candidate, party, or partisan group. Therefore, the risk of adverse publicity for your efforts should be considered in deciding whether to deal with them in any manner. Note that 501(c )(3) organizations may coordinate their voter protection efforts with other 501(c)(3) organizations, and with other kinds of tax-exempt groups, businesses and other organizations, so long as the 501(c)(3)'s collaborators themselves are complying with 501(c)(3) nonpartisan standards in their coordinated efforts. Hypotheticals: Political Party X invites officials or staff of 501(c)(3) organizations to participate in private briefings to discuss voter engagement (voter registration and GOTV) strategies. 501(c)(3) organizations cannot participate in such meetings. The danger is that by sharing plans and strategies, either the campaign or a 501(c)(3) will allocate its resources accordingly. For instance, if the 501(c)(3) knows Party X is doing heavy voter registration in a particular neighborhood, the 501(c)(3) could shift its resources elsewhere; or, Party X may choose not to hire workers in State T after hearing that a 501(c)(3) will be doing extensive voter outreach in State T. Such post-meeting conduct could breach 501(c)(3) requirements or amount to an unlawful in-kind contribution to Party X by the 501(c)(3) group. In contrast, if a party hosts a public briefing, a 501(c)(3) organization may attend in order to learn public information, so long as it otherwise acts consistently with its 501(c)(3) status. A 501(c)(3) organization prepares a voter outreach plan and wants to share it with candidates running in the jurisdiction. The 501(c)(3) can do so only if it previously or simultaneously publicly disseminates the information (such as in a press release or by posting on its website), and it sends the plan to all candidates in a particular race or all political parties in the jurisdiction. A 501(c)(3) organization hears about voter intimidation efforts in a particular state, and calls both major political parties to alert them to this. A 501(c)(3) organization can encourage voters to exercise their right to vote. In doing so, if a 501(c)(3) identifies voter intimidation practices that interfere with the right to vote, it can contact the local election administration agency or other appropriate election representatives to resolve the issue, contact a bipartisan set of candidates or parties in a race and urge them to weigh in, and contact the news media as well. Note that in some jurisdictions there are viable third parties, and, if so, they should be contacted along with the two major parties. Political Party Z is concerned about the voter intimidation efforts in a particular state, and reports it to a 501(c)(3) organization. Although there is less risk when a partisan source, uninvited, provides information to a 501(c)(3) organization in a one-way communication, the 501(c)(3) organization must exercise caution in responding and must not use the information in a partisan manner. The organization can investigate and take appropriate steps to protect voters in accordance with its own charitable mission. However, it cannot enter into joint efforts with Party Z to do so or share its findings with Party Z before making the information public. And, if it mentions Party Z as the source of the original information, it must do so without praise and say that it welcomes such information from all sources and will treat all information received on its merits. If the 501(c)(3) organization takes action as a result of information received from a party or campaign committee (especially if the 501(c)(3) alters previously planned activities), it should have clearly articulated reasons why these new activities further its nonpartisan, voter protection goals. If previously planned activities were changed as a result of this information, then the 501(c)(3) must determine that the new activity provides greater nonpartisan voter protection benefits than the previously planned activities. A 501(c)(3) organization brings a lawsuit alleging voter registration misconduct in several college towns in a state. Political Party B and Candidate A have factual evidence and legal arguments that they believe will strengthen the 501(c)(3)'s case. Can the 501(c)(3) meet with representatives of the party and the candidate to discuss their suggestions? Can the party or the campaign otherwise provide this information to the 501(c)(3)? To avoid partisan coordination or even its appearance, the 501(c)(3) should not meet with representatives of the party or candidate unless representatives from other parties and opposing candidates also attend. Instead, the party, the candidate, or both may provide the information to the 501(c)(3) by (i) issuing a press release or otherwise making the information publicly available or (ii) sending the materials, unsolicited, to the 501(c)(3). The 501(c)(3) must determine whether or not the evidence and/or arguments further its nonpartisan, voter protection litigation goals and not just the partisan goals of Party B or Candidate A. Even if the materials do further its goals, the 501(c)(3) should ensure that its litigation decisions are undertaken independently and incorporate any received legal research or argument in its pleadings after a critical analysis of them and in its own words. The information contained in this fact sheet and any attachments is being provided for informational purposes only and not as part of an attorney-client relationship. The information is not a substitute for expert legal, tax, or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code. Alliance for Justice publishes plain-language guides on nonprofit advocacy topics, offers educational workshops on the laws governing the advocacy of nonprofits, and provides technical assistance for nonprofits engaging in advocacy. For additional information, please feel free to contact Alliance for Justice. http://www.allianceforjustice.org
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