HUD Secretary Speaks on Impact of Automatic Spending Cuts

HUD Secretary Speaks on Impact of Automatic Spending Cuts

02/14/2013 BY: ESTHER CHO

In his written testimony before the Senate Committee on AppropriationsHUD Secretary Shaun Donovan spoke on the potential impact to households across the nation if across-the-board automatic spending cuts were to take effect.

The cuts are scheduled for March 1 and may be triggered if Congress fails to agree on a plan to reduce the deficit.

“[T]hese cuts would be deeply destructive, would damage the economy, and would harm numerous families, individuals, and communities across the nation that rely on HUD programs,” Donovan stated.

Speaking from HUD’s perspective, Donovan specifically warned the cuts would keep 75,000 households from receiving foreclosure prevention, pre-purchase, rental, or other counseling though HUD housing counseling grants.

“This counseling is crucial for middle class and other families who have been harmed by the housing crisis from which we are still recovering, and are trying to prevent foreclosure, refinance their mortgages, avoid housing scams, and find quality, affordable housing,” he added.

Donovan also stressed the important role of counseling to prevent foreclosures.

“Distressed households who receive counseling are more likely to avoid foreclosure, while families who receive counseling before they purchase a home are less likely to become delinquent on their mortgages,” he explained.

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