Federal budget woes could cut foreclosure counseling

The prospect of federal budget cuts could reduce the number of people in Minnesota who get foreclosure counseling.

The director of the state's foreclosure counseling service said Wednesday the number of Minnesotans seeking foreclosure prevention help this year is nearly the same pace as last year - when foreclosures set a record.

Julie Gugin, director of the Minnesota Homeownership Center, predicts the current pace of people seeking foreclosure prevention help, which is only slightly below last year's record pace, will continue through next year. She said the federal budget impasse creates the prospect of a $4 million shortfall in foreclosure prevention funding in Minnesota.

"This significant gap in the timing of this funding could really impact the ability of our network to remain intact," Gugin said.

Gugin said a $1 million grant from Minnesota Housing, a state agency, helps fill a short-term funding gap. But that still leaves a hole in the budget, she said.

"We are counting on the federal government to come through with additional funds in the first quarter of 2011," Gugin said. "We are counting on Minnesota's philanthropic community, financial institutions and other governments to recognize the importance of this work for individual families as well as for the stability of communities."

Gugin said the 74 counselors at the Center's 50 cooperating agencies have, over the years, helped 20,000 people avoid foreclosure.

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