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The left-wing mortgage counseling racket

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By Michelle Malkin  •  April 3, 2008 06:08 AM

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Members of the US Senate are patting themselves on the back over their agreement on a housing bill yesterday. If you want to see a photo that should send shivers down your spine, check out the pic of Harry Reid and company. Blech. A disastrous provision to allow bankruptcy judges to rewrite mortgage contracts was dropped, but Republicans agreed to include another key provision pushed by Democrats: $100 million for mortgage counseling to be administered by non-profit groups. The Dems originally pushed for $200 million.

What I haven’t heard publicly from a single Republican senator is any objection to where all that money is going–and what exactly taxpayers are getting for it. Conservatives in the Senate (the few of them that are left) seem to have just rolled over and accepted at face value the liberal premise that the subprime mess was primarily created by a lack of education–as opposed to high-risk borrowers and lenders consciously making bad decisions and expecting now to be insulated from the consequences of their actions. From the way Harry Reid and company talk about the $100 million mortgage counseling provision, you would think helpless, hapless, vulnerable borrowers are being left adrift with no one to turn to for information.

As I’ve pointed out several times over the past year, mortgage counseling is a thriving racket that benefits far Left groups ranging from the AARP to ACORN to La Raza and Legal Aid. The Department of Housing and Urban Development funds hundreds, if not thousands, of these groups across the country. In October, HUD announced more than $44 million in new housing counseling grants to over 400 state and local efforts. The White House has increased funding for housing counseling by 150 percent since taking office in 2001.

Here’s a list (PDF) of national, regional, state, and local housing counseling grantees for fiscal year 2007–all of whom presumably were in operation when subprime borrowers got into the current mess. Among the major recipients:

*The AARP scored nearly $400,000 for training.

*The National Council of La Raza scooped up more than $1.3 million.

*The National Urban League raked in nearly $1 million.

*ACORN Housing Corporation received more than $1.6 million.

A full list of grantee profiles is here (PDF). A small sample:

National Council of La Raza (NCLR) Washington, DC
$1,322,652 – Comprehensive Counseling

Founded in 1968, The National Council of La Raza (NCLR) is a private, nonprofit organization and the largest national Hispanic civil rights and advocacy organization in the United States. Through its network of nearly 300 affiliated community-based organizations, NCLR reaches millions of Hispanics each year in 41 states, Puerto Rico, and the District of Columbia. To achieve its mission, NCLR conducts applied research, policy analysis, and advocacy. In addition, it provides capacity-building assistance to its affiliates who work at the state and local level to advance opportunities for individuals and families. NCLR’s Homeownership Network is comprised of 43 organizations providing bilingual housing counseling services in 24 states.

Neighborhood Reinvestment Corporation dba NeighborWorks® America Washington, DC
$1,424,711 – Comprehensive Counseling
$2,600,026 – Housing Counseling Training

NeighborWorks America is a national nonprofit organization created by Congress to provide financial support, technical assistance, and training for community-based revitalization efforts. NeighborWorks’ core competencies include homeownership and affordable rental programs, professional training and certification, consumer counseling and education, rehabilitation of housing stock, outcomes measurement, and the training and empowerment of community residents. The nationally recognized NeighborWorks Training Institutes are the largest and most respected trainer of community development professionals in the United States, providing professional training and certification in all aspects of community development and affordable housing. NeighborWorks’ Center for Foreclosure Solutions trains foreclosure counselors, conducts public outreach campaigns, and develops strategic solutions, all in conjunction with national partners. It sponsors the HOPE hotline for financially distress homeowners at 888-995-HOPE.

ACORN Housing Corporation (AHC)
Philadelphia, PA
$1,628,829 – Comprehensive Counseling
Established in 1985, ACORN Housing Corporation (AHC) is a HUD-approved housing counseling intermediary providing housing counseling to low- and moderate-income and minority households in 38 cities. AHC housing counselors work closely with families to help them qualify for mortgages, home improvement loans, mortgage refinancing, reverse mortgages, or a delinquency payment strategies. AHC has special programs for first-time homebuyers, Spanish-speaking households, home refinancing, mortgage assistance, and individuals with high interest rate loans. AHC specializes in working with first-time home buyers and homeowners who are having trouble with their mortgages. AHC has programs with major lenders to provide more flexible loan terms and lower costs and has been a national leader in fighting predatory lending and helping people with unfair loans.

Asian, Inc.
San Francisco, CA
$20,000.00
Asian, Inc. works to strengthen the physical, economic, and social development of Asian American communities in Northern California. The agency employs a multi-lingual and multi-cultural staff with varied backgrounds. Asian, Inc.’s First Time Homebuyer’s Education and Counseling Program provides bilingual first time homebuyer education to households in the City and County of San Francisco and Alameda County. These households are located in the distressed, low-moderate income areas of San Francisco, such as Chinatown, Tenderloin, South of Market Street, Visitacion Valley, Bayview Hunters Point, Excelsior, and neighborhoods with heavy concentration of Asian residents such as the Richmond and Sunset districts. The bilingual workshops are conducted by staff in Chinese and Vietnamese, in addition to English, and supported with bilingual print and audio-visual materials.

AARP Foundation
Washington, DC
$399,974 – Housing Counseling Training
The AARP Foundation’s Reverse Mortgage Education Project (RMEP) has developed a comprehensive training, testing, technical assistance, and evaluation system to improve the quality and accountability of HECM counseling on a national basis. The system includes unique HECM-specific tools and technologies that have been carefully developed, tested, and refined over the past seven years in cooperation with a growing number of local counseling agencies and with input from HUD, HECM counselors, and HECM industry leaders. From FY 2001 to FY 2006, RMEP created, managed, and coordinated a national HECM counseling network that provided HECM counseling to 47,704 households.

National Urban League (NUL)
New York, NY
$914,415 – Comprehensive Counseling
A housing counseling provider for over 30 years, the National Urban League (NUL) coordinates a network of 31 local affiliates that provide housing counseling services in 20 states. NUL affiliates provide comprehensive housing counseling, including pre-and post-purchase counseling. In addition, affiliates tailor their services to address the unique needs of the communities they serve, including providing education and outreach on predatory lending and fair housing issues, directing clients to mortgage products with flexible underwriting criteria, and encouraging the “unbanked” to use financial services as a way to enhance their credit worthiness. NUL also coordinates its counseling activities with a diverse group of public and private organizations in unique ways that benefit their clients. For example, NUL staff has collaborated with Fannie Mae to develop a flexible mortgage instrument to fit the needs of low-income minorities

Jacksonville Area Legal Aid Inc.
Jacksonville, FL.
Comprehensive Counseling
$34,461.63
Jacksonville Area Legal Aid Inc. (JALA), established in 1976, is a not for profit agency providing civil legal assistance to low income persons in need of private legal assistance. JALA’s mission is to obtain and provide high quality legal assistance to low income and other special needs groups and to stimulate and empower groups of poor people to accomplish energetic and affirmative advocacy. JALA provided counseling to 1,541 clients during FY05-06 seeking homebuyer education, predatory lending and HECM counseling.

Legal Aid Society of Hawaii
Honolulu, HI
$20,000.00
The Legal Aid Society of Hawaii is Hawaii’s oldest and largest non-profit law firm, dedicated to assisting the low-to modern-income community. The mission is to achieve fairness and justice for Hawaii’s people through quality representation, advocacy, community partnerships, education and outreach. Legal Aid’s Housing Counseling Program is broken down into two main categories: (1) The Renter’s Assistance program that provides renters with a broad range of legal assistance about tenants’ legal rights and responsibilities and (2) The Homeownership Counseling provides basic pre-purchase counseling, default counseling or Post-Purchase counseling, including reverse mortgage counseling. Legal Aid Society of Hawaii has branch offices located on the islands of Molokai, Maui, Kauai, Hilo, Kona, and Oahu.

Legal Aid of Western Missouri
Kansas City, MO
$70,615.72 – Comprehensive Counseling

Texas RioGrande Legal Aid
Weslaco, TX
$74,231.13 – Comprehensive Counseling

Take a look at the list of HUD-approved mortgage counseling groups in California alone. The list goes on for miles. Counselors are available in every language under the sun–from Spanish to Hindi, Hmong, Cambodian, French, and Portuguese. Just picking an example at random, the Eden Council for Hope and Opportunity in Livermore, CA provides…

-Home Equity Conversion Mortgage Counseling
- Mortgage Delinquency and Default Resolution Counseling
- Prepurchase Counseling
- Renters Assistance

…in the following languages…

- Arabic
- Cambodian
- Cantonese
- Chinese Mandarin
- Czech
- French
- Hindi
- Indonesian
- Korean
- Polish
- Portuguese
- Russian
- Spanish
- Turkish
- Vietnamese

And on and on and on it goes.

If all of the available counseling assistance isn’t enough to prevent the current mess we are in, why are Republicans in Washington allowing one more cent to be thrown at the problem–money that will go to heavy-hitting left-wing groups who will turn around and undermine principles of economic conservatism at every turn?

Ask your Senators:

202-224-3121.

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