Senators introduce bipartisan amendment to the stimulus bill
WASHINGTON, DC- U.S. Senators Bob Casey (D-PA), Arlen Specter (R-PA), Pat Leahy (D-VT), Chris Dodd (D-CT), Charles Schumer (D-NY) and John Kerry (D-MA) introduced a bipartisan amendment to provide state and local governments with more flexibility in using funds allocated by the Department of Housing and Urban Development (HUD) under the Neighborhood Stabilization Program (NSP).
“A disturbing byproduct of the increased rates of foreclosures is that entire communities are being affected and local economies are being dragged down,” said Senator Casey. “We have to get these neighborhoods stabilized efficiently and quickly and we must give the states the flexibility to allocate the funds so that more families and communities don’t suffer.”
“Halting the wave of foreclosures is critical to sparking an economic recovery,” Senator Specter said. “This amendment includes key provisions of a bill I introduced last year to ensure that more attention, counseling and resources are directed toward preventing foreclosures, stabilizing the housing market and getting the economy back on track.”
“Addressing the housing crisis is a vital step in moving the country toward economic recovery. This amendment will give states tools they need to rehabilitate or redevelop homes in order to stabilize neighborhoods. That will help communities in Vermont and around the country address the issues brought on by increased foreclosures,” said Senator Leahy.
“Foreclosures tear apart families, destroy communities and contribute to our economy’s downward spiral,” said Dodd. “We created the Neighborhood Stabilization Program to give communities resources to combat the effects of the rising tide of foreclosures. Today’s bill and amendment would further enhance communities’ efforts by boosting funding, giving local governments the freedom to direct these funds to the communities who need them most, and providing legal and other assistance to families facing foreclosure. Unless we act now to deal with the effects of foreclosures, the hemorrhaging will get worse – layoffs will increase, more businesses will shutter their doors, and more American families will suffer.”
"A foreclosure isn't just a tragedy for the family that loses its home -- it is also a drag on the property values of every other home in that neighborhood. This measure will provide communities with critical resources to stay strong and vibrant in the face of this ongoing housing crisis," Senator Schumer.
“Mayors know their communities better than anyone and they are demanding that Washington do more to end the foreclosure crisis devastating our cities,” said Senator Kerry. “Giving our mayors more flexibility to fight foreclosures is the right thing to do and I’m glad Bob Casey and I have teamed up on this amendment.”
In July 2008, Congress passed and President Bush signed into law the Housing and Economic Recovery Act (HERA). The Neighborhood Stabilization Program was included as part of that bill to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. The Neighborhood Stabilization Program (NSP) provides grants to every state and certain local communities to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes.
Title III of HERA allocated $4 billion in emergency assistance to state and local governments to use for the rehabilitation of abandoned and foreclosed properties in their jurisdictions. These funds were crucial to assist states and municipalities in acquiring and redeveloping abandoned and foreclosed properties that caused neighborhood blight, increased crime, and lost tax revenue.
“People who lose their homes can hardly be expected to help stimulate the economy to a recovery. And the mortgage relief provisions won't work well without availability of legal advice to mortgage holders,” said Thomas M. Susman, Director, Governmental Affairs Office American Bar Association.
This amendment will allow grantees more flexibility in using the funds by
Permitting up to 10% of funds to be used for foreclosure prevention activities, to be defined by HUD
Allowing states receiving the minimum allocation under NSP to use the funds to address statewide concerns
Setting aside $30 million for legal assistance for low- and moderate-income homeowners or tenants related to homeownership preservation, home foreclosure prevention, and tenancy associated with home foreclosure.
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