Home prices nationally fell 3 percent in the first quarter of this year. Foreclosure rates remain devastatingly high, and more than 28 percent of U.S. homeowners are now “underwater,” owing more on their mortgages than their homes are worth.

Federal Reserve Chairman Ben Bernanke said recently that the depressed housing market is holding back the nation’s economic recovery – and economists now predict that the market will not bottom out until next year, and perhaps even later. 

We continue to see the ripple effect of the housing market collapse locally, as cities and states experience decreased community investment and property tax revenue. 

As Housing and Urban Development Secretary Shaun DonovanShaun L. S. DonovanHouse Dems call on OMB to analyze Senate budget plan Overnight Finance: Dems turn up heat on Wells Fargo | New rules for prepaid cards | Justices dig into insider trading law GOP reps warn Obama against quickly finalizing tax rules MORE has said, the counseling program is more critical now than ever. Local counseling agencies approved and funded by HUD have been at the front lines battling foreclosures and modification scams. In many instances, they are the only places where families and the elderly can turn for help in keeping their homes, and where homeowners can be protected from predatory lending and reverse mortgage scams. 

The program’s record speaks for itself. Since 2009, housing counseling agencies have:

  • Worked to prevent mortgage delinquency for 2.6 million households, with nearly 834,000 avoiding foreclosure.
  • Provided counseling to more than 420,000 families or individuals considering a home purchase, resulting in 185,000 who purchased homes or are ready to do so. 
  • Assisted more than 590,000 renters and homeless individuals to either resolve tenant issues or find shelter.

In cutting $88 million from the program for the rest of the current fiscal year, some in Congress claimed the housing counseling program was not needed because it duplicated the National Foreclosure Mitigation Counseling Program, which is funded by Congress and administered by NeighborWorks America.

That is not the case, as these programs are separate and distinct. Housing Counseling provides help on a wide range of topics, often to first-time homebuyers who are so crucial to the market’s recovery. Housing Counseling agencies are also critical resources to elderly homeowners who are considering reverse mortgages. Foreclosure mitigation counseling deals solely with homeowners who are facing foreclosure.

The truth is, we need both programs fully funded as proposed by the Obama administration for fiscal year 2012 – including restoring the $88 million for housing counseling. A failure to do so will leave thousands of individuals and families without help while they struggle to navigate complex foreclosures, avoid modification scams, prevent evictions and homelessness, and find affordable rental housing.

Moreover, it is imperative that we continue to make investments that build our neighborhoods and communities. Homeownership leads not only to economic security for families, but also has a direct impact on local economies, which are largely supported by small businesses and tax revenue generated from homeowners. 

Seedco recently surveyed the local affiliate groups with whom it works in 14 states offering housing counseling. Of the 28 affiliates that responded, more than a third said the lost funding will mean shutting down their housing counseling program. Three-quarters of the others will have to cut services and lay off staff.

Without housing counseling agencies to provide the services uniquely supported by the HUD funding, the housing crisis across the country will only intensify and threaten the nation’s overall economic recovery. That’s the last thing we need right now.

Barbara Dwyer Gunn is president and CEO of Seedco, a national nonprofit that advances economic opportunity for people, business and communities in need.