I'm not going to spoil this one with my comments. I'm going to let it speak for itself…
HUD funds to ACORN, others triple despite criticism
By Matt Kelley, USA TODAY
WASHINGTON — Federal funding for a housing counseling program carried out by local non-profit groups such as ACORN has more than tripled since 2002, even though it has been criticized by government auditors for failing to show results.
President Obama's budget calls for a 54% increase next year — $100 million in all — for the program, which helps people buy or refinance a home, prevent a foreclosure or find rental housing. The Senate agreed, while the House of Representatives suggested $70 million; final negotiations over the bill are pending.
The Department of Housing and Urban Development (HUD) has been unable to provide much proof the program works, according to government reports, despite an increase in funding from $20 million in 2002 to $65 million last year.
The reports found:
• "At present there is limited evidence of the benefits of counseling in making homeownership more sustainable," according to a HUD-commissioned study in 2008 by consulting firm Abt Associates. Abt found that 23% of those completing foreclosure-prevention counseling in 2007 managed to stay in their homes.
• HUD's inspector general warned in 2006 that the department inadequately supervised counseling agencies and failed to sufficiently measure results. "Despite not meeting its expectations, HUD continued to propose increases in funding," the report said. HUD has improved training and performance reviews for the program and soon will release a new housing counseling handbook, department spokeswoman Andrea Mead said in an e-mail.
• Earlier this year, non-partisan congressional investigators at the Government Accountability Office reviewed consumer protections for elderly homeowners seeking reverse mortgages. The undercover probe found that none of 15 HUD-funded counselors provided all of the required information. HUD Assistant Secretary David Stevens responded in a letter that the department was making improvements including hiring "mystery shoppers" to test reverse mortgage counseling and report back to counselors' supervisors.
In an interview, Mead said the department continually reviews its grants to make sure recipients "are achieving the program's goals and serving the public interest. If organizations don't meet those program guidelines, they won't get funding."
None of the government reports singled out any groups that received federal funding for criticism. However, one of them — the ACORN Housing Corp. — drew national attention last month after conservative activists released undercover videos taken at several offices of ACORN affiliates, including in New York and Washington, where housing counselors gave advice on buying a house for a brothel. The employees worked for a program that gets HUD funding but were not paid with government funds, ACORN Housing spokeswoman Alyson Chadwick.
Mead said in an e-mail that HUD has no way of knowing whether the workers caught on the videos were involved in government-funded programs.
ACORN (Association of Community Organizations for Reform Now), the third-largest recipient of federal housing counseling money, has received $10.5 million from HUD for housing counseling in the past decade. Since the videos became public, the House and Senate have voted to prohibit future federal funding of ACORN.
"The issue with ACORN underscores a much larger problem within our existing bureaucracy: All too often we don't know how taxpayer dollars are being spent and if they are being spent in the right way," said Kurt Bardella, a spokesman for one of ACORN's critics, Rep. Darrell Issa, R-Calif.
NeighborWorks America, a non-profit created by Congress to boost home ownership, is the largest recipient of HUD counseling funds. It has received $17.4 million in the past decade.
Officials from NeighborWorks and ACORN say they're confident the program is effective.
"We know it makes a difference. We know a well-informed consumer makes better choices," says Marietta Rodriguez of NeighborWorks. It's difficult to get complete information about results, she added, because "we're not always able to track everyone we touch."
Bruce Dorpalen, ACORN's housing counseling director, says that of more than 40,000 ACORN clients seeking help preventing a foreclosure in the past year, about 8,000 got favorable mortgage changes. He said 18,000 more are in the loan-modification process. "This is a success story that not enough people know about," he said.
The foreclosure crisis means HUD should provide more funding to help people at risk of losing their homes, says Alan Mallach, a housing expert at the Brookings Institution, a think tank that often takes liberal positions. "I don't think there's any substitute for getting more and better counseling out there," Mallach says.
Andrew Carswell of the University of Georgia, who studies housing counseling, published an academic study last month that found mixed results five years after counseling clients in Philadelphia bought a home. He says the program is well-intentioned but said some counselors "could use a little bit more oversight."