Last month’s landmark National Foreclosure Settlement — reached in response to a nationwide epidemic of mortgage servicing abuses — was welcome news to thousands of homeowners in our region who are about to lose their homes. Unfortunately, Virginia is considering diverting its share of settlement funds away from housing counseling programs that help struggling homeowners. That would be penny-wise and pound-foolish, and state elected officials need to hear that message loud and clear.

The District, Maryland and Virginia will receive a combined $136.7 million from the settlement. District and Maryland officials have indicated that they will use the money primarily on foreclosure prevention counseling and other related issues. But in Richmond, the General Assembly is giving strong consideration to shifting its share — almost $70 million — away from proven housing counseling programs to programs that aren’t related to housing. That would be a travesty.

Homeowners at risk of foreclosure face a thicket of complicated programs offered by banks, usually without the financial sophistication to understand how they can qualify and which program is best for them. Many are preyed upon by unscrupulous “mortgage rescue” schemers who promise to save their homes for a hefty, up-front fee. To navigate these tricky waters, homeowners need the kind of honest expertise offered only through HUD-certified, nonprofit housing counseling agencies, which are often the last line of defense against foreclosure and mortgage scams.

Such programs can have a dramatic impact. Foreclosure prevention counseling is one of the most cost-effective interventions available, both as a means of keeping people in their homes and of helping to stabilize neighborhoods and housing prices. Research by the Urban Institute shows that homeowners who work with a certified housing counselor are significantly more likely to avoid a foreclosure and receive more favorable loan modifications and are more likely to stay current on their mortgages.

While the foreclosure settlement is a positive step forward, the crisis is far from over. Recent reports reveal a staggering 113,000 mortgages in default in our region alone. According to the Capital Area Foreclosure Network, a regional coalition led jointly by the Metropolitan Washington Council of Governments and the Nonprofit Roundtable of Greater Washington (and which includes foreclosure counseling organizations as members), only one in five of these homeowners received information from a housing counselor in 2010. Northern Virginia is particularly underserved. Prince William County, for example, has just three certified counselors for the county’s 6,000 homeowners facing foreclosure and more than 30,000 households that owe more on their mortgages than their homes are worth.

Across Virginia, neighborhoods have been put at risk by multiple foreclosures. State lawmakers should do the right thing and devote proceeds from the foreclosure settlement to housing counseling programs. That would be good for homeowners and good for the region.

Chuck Bean is president of the Nonprofit Roundtable of Greater Washington. Frank J. Principi is chairman of the Metropolitan Washington Council of Governments and a member (D-Woodbridge) of the Prince William Board of County Supervisors.