Measure based on successful Pennsylvania program
WASHINGTON, DC – U.S. Senator Bob Casey (D-PA) introduced an amendment today to provide temporary mortgage relief to unemployed workers. The amendment, based on his Homeowners’ Relief and Neighborhood Stabilization Act bill, would help to slow another wave of foreclosures by providing $3 billion for loans for up to 24 months for unemployed or underemployed homeowners. The legislation is co-sponsored by Senators Charles Schumer (D-NY) and Kirsten Gillibrand (D-NY).
“We must provide support to help Pennsylvanians get back on their feet and stay in their homes,” said Senator Casey. “Neighborhoods continue to suffer from housing price declines, lost property tax revenue and abandoned properties. This amendment will also continue the good work of the Neighborhood Stabilization Program which has helped state and local governments across the country rehabilitate neighborhoods and communities that have been devastated by high numbers of foreclosure filings. The need far outstrips the money available.”
“Right now, middle class families across the country are choosing between paying mortgage bills and putting food on the table, but this legislation ensures they don’t have to make that choice,” said Schumer. “But we’re not only helping homeowners, we’re also saving neighborhoods and communities from the ripple effects of home foreclosures by giving them the tools and resources necessary to combat issues of blight and vacant property. This legislation will have a big impact where it’s needed most.”
“During these tough economic times, we need to do more to help prevent foreclosure,” said Senator Gillibrand. “This amendment will help keep thousands of families struggling to find a new job in their homes, and give hard-hit communities the resources to stabilize their housing market.”
The House-passed version of Wall Street reform includes a similar provision. Members of the Congressional Black Caucus have also urged the provision be included in the final bill. Pittsburgh was recently denied application for Neighborhood Stabilization funding. The U.S. Department of Housing and Urban Development (HUD) stated that $15 billion worth of applications were submitted for $2 billion in funds available.
According to RealtyTrac, foreclosures in Pennsylvania increased by 20% from 2008 to 2009 and nationally by 21% to a record 2.8 million foreclosure filings in 2009. In March, over 350,000 properties nationwide got foreclosure filings, their highest monthly total since RealtyTrac started reporting numbers in 2005.
Modeled on the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) administered by the Pennsylvania Housing Finance Agency since 1983, key provisions of the Homeowners’ Relief and Neighborhood Stabilization Act of 2010 include:
• Direct $3 billion in TARP funds to a program established at HUD called the Emergency Homeowners Relief Fund
• Allow homeowners facing a temporary loss in income due to unemployment, underemployment or medical condition to receive low-interest loans for up to 24 months to assist in their monthly mortgage payment. Homeowners must be at least 3 months behind on their mortgage payments and have received a notice stating that the holder of the mortgage intends to foreclose
• Instruct the HUD Secretary to take a homeowner’s ability to repay into account when establishing the terms, conditions and rates of the loan. Interest rates shall be fixed for the life of the loan and capped at FHA rates and prepayment penalties may not be assessed
• Provide $1 billion to the Neighborhood Stabilization Program, created in the Housing and Economic Recovery Act of 2008, to provide grants to state and local governments and eligible entities to purchase and redevelop foreclosed and abandoned homes and residential properties
Congresswoman Maxine Waters introduced similar legislation in the House of Representatives that was included in H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009 which passed the House of Representatives.
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