Sponsors (3)
The bill expands access to and potential funding for foreclosure counseling and increases oversight to improve quality, but stricter performance enforcement and suspension/termination mechanisms risk reducing local counseling capacity and unfairly penalizing counselors serving higher‑risk communities.
Homeowners who are 30+ days delinquent on FHA, VA, or USDA loans are offered foreclosure mitigation counseling, increasing access to help before foreclosure.
Borrowers of FHA-insured loans may have counseling costs paid at fair-market rates by the Mutual Mortgage Insurance Fund when statutory conditions are met, reducing out-of-pocket costs for low- and moderate-income homeowners.
Periodic on-site and performance reviews are required, which could improve overall counseling quality and reduce foreclosure rates by holding agencies and counselors accountable.
Organizations could lose HUD assistance based on performance reviews, risking service disruptions for borrowers who rely on local counseling providers.
Individual counselors face suspension after two failed retests, which could reduce the number of available counselors and delay access to help in some areas.
Comparing counselor performance to default rates may unfairly penalize counselors who serve higher‑risk borrowers or areas with worse market conditions, even with ‘comparable market’ adjustments.
Based on analysis of 2 sections of legislative text.
Revises HUD housing counseling rules to focus counseling on reducing foreclosures, require regular performance reviews of counseling agencies and individual counselors, and give HUD authority to remediate or remove counselors who fail to meet standards. It requires that borrowers who are 30 or more days behind on certain government‑backed loans be offered foreclosure mitigation counseling and allows the FHA Mutual Mortgage Insurance Fund to pay fair market counseling costs for delinquent FHA borrowers if existing statutory conditions are met.
Introduced December 15, 2025 by David Scott · Last progress December 15, 2025