The Department of Housing and Urban Development said it is awarding more than 500 housing counseling organizations with $73 million in grants for 2011, up 22% from this year.
"Over the past 20 months, HUD-approved mortgage counselors have helped 3 million families," HUD secretary Shaun Donovan said on Thursday.
These counselors provide financial advice, help troubled homeowners facing foreclosure and seniors considering a reverse mortgage. Counseling agencies can use $9.5 million of the grants to assist seniors seeking reverse mortgages or an FHA-insured Home Equity Conversion Mortgage.
For the first time, HUD is dedicating funding to provide borrowers with loan modification and mortgage scam assistance.
"We have targeted awards to 73 housing counseling agencies around the country for that use," Donovan said at a press conference.
The HUD secretary noted a recent report by NeighborWorks America that shows that homeowners facing foreclosure have a 1.7 times better chance of saving their homes if they receive counseling.
The report also shows borrowers receiving counseling generally end up with much lower monthly payments on loan modifications than other borrowers.
Counseling programs enabled borrowers to save on average $555 per month on loan modifications, the report says, compared to $288 per month for other borrowers.
