With estimates showing a shadow inventory that numbers in the millions, it’s clear that the foreclosure crisis is not done wreaking havoc on the housing market. It seems that the ideal outcome for families, communities, and investors alike would include avoiding as many foreclosures as possible and keeping homes occupied. A number of strategies have been deployed in support of this goal, some more effective than others. One thread is common among the diverse array of approaches: the importance of HUD-certified housing counselors, who were hit with a major funding cut in the FY 2011 budget. Please take action this week to help get this funding restored for the 2012 budget.

Bank of America recently announced that it will donate 150 vacant, foreclosed properties to Chicago-area nonprofits for rehab or demolition. Housing Wire reports:

Members of the Regional Home Ownership Preservation Initiative, of which Woodstock Institute is a lead partner, sent a letter urging the Illinois delegation to the U.S. House of Representatives to vote against H.R. 839, The HAMP Termination Act of 2011, which would cancel funding for the Home Affordable Modification Program (HAMP). In the letter, Housing Action Illinois, Metropolitan Planning Council, Neighborhood Housing Services of Chicago, South Suburban Mayors and Managers Association, and Woodstock Institute told representatives:

When the South Suburban Housing Collaborative and the West Cook County Housing Collaborative were formed in 2009, they were built on a bold idea: that municipalities could look beyond political boundaries and work together to tackle the pressing housing needs of their areas, from foreclosure response to affordable housing to strategic and sustainable development. It was a tall order, and one that had scarcely been tried elsewhere.  Almost two years later, the experiment is starting to show positive results. The West Cook County Housing Collaborative broke ground on their first project this month in Maywood.

It’s clear that vacant homes put a damper on their surrounding community. Not only are they eyesores, they put other homes at risk of losing value and may attract crime and other destabilizing elements. To minimize these risks, many municipalities have ordinances that allow them to hold the homes’ owners responsible for securing and maintaining the property. What can already-strapped local governments do if it’s unclear who the owner is, or the owner hasn’t notified them that the property is vacant?

Efforts in the U.S. House of Representatives to eliminate or cut funding for federal programs and agencies designed to protect homeowners, consumers, and investors reflect the same flawed thinking that former Federal Reserve Chairman Alan Greenspan admitted was wrong when he testified before Congress in October 2008. Greenspan, a longtime champion of deregulation, said that he had been mistaken to put so much faith in the self-correcting power of free markets and that he had failed to anticipate the foreclosure and economic crisis that such deregulation ultimately generated.