Sponsors (3)
This bill expands and funds early foreclosure-mitigation counseling and increases oversight to improve quality, but stricter performance-based sanctions and possible funding terminations risk reducing local counseling capacity and unfairly penalizing providers who serve higher-risk or disadvantaged borrowers.
Homeowners who become 30+ days delinquent are entitled to foreclosure-mitigation counseling early in the delinquency process, increasing chances to avoid foreclosure.
FHA-insured borrowers (especially lower-income homeowners) can have counseling costs paid at fair market rates by the Mutual Mortgage Insurance Fund when statutory conditions are met, reducing out-of-pocket barriers to getting help.
Periodic on-site and performance reviews of HUD grantees aim to improve counseling quality and program accountability, which could raise the effectiveness of foreclosure-mitigation services.
Counselors who fail performance comparisons may face retesting, probation, or permanent certification suspension, which could reduce local counseling capacity and make it harder for homeowners to get help.
HUD may deny renewal or terminate assistance to organizations after performance reviews, risking loss of counseling services in some areas and creating local service gaps.
Using aggregate counselor performance versus default rates could penalize counselors who serve higher-risk borrowers or disadvantaged markets if measures are not risk-adjusted, worsening access and equity for vulnerable groups.
Based on analysis of 2 sections of legislative text.
Strengthens HUD oversight of housing counseling, adds counselor certification/performance rules, requires foreclosure-mitigation counseling for delinquent borrowers, and authorizes FHA fund payments for eligible counseling.
Introduced December 15, 2025 by David Scott · Last progress December 15, 2025
Makes HUD run stronger performance reviews of housing-counseling programs and gives HUD new authority to certify, retest, place on probation, or permanently suspend individual counselors. Requires counseling offers and payments for foreclosure-mitigation help to borrowers who are at least 30 days delinquent on certain government-backed mortgages (including FHA, Section 184/184A, VA, and USDA loans), and allows the FHA Mutual Mortgage Insurance Fund to pay fair market counseling costs for eligible FHA-insured loans when statutory requirements are met.