Crucial NAACP-Supported Housing Foreclosure Relief Bill Passes House; Senate to Act by Sat. July 26 2008
OMNIBUS BILL WOULD PROVIDE $300 BILLION TO HELP AVOID FORECLOSURES, ESTABLISH A TRUST FUND TO PROVIDE LOW-INCOME HOUSING, PROVIDE $4 BILLION TO STATES & LOCALITIES TO DEAL WITH FORECLOSED PROPERTIES
On Wednesday, July 23, 2008 the U.S. House of Representatives passed, by a margin of 272 yeas to 152 nays, an omnibus housing bill that is intended to address a myriad of housing needs throughout the Nation for years to come. Specifically the bill, H.R. 3221, the “Housing and Economic Recovery Act of 2008” takes a number of crucial steps in the right direction to address a housing and financial crisis that is of profound concern to the NAACP communities nationwide.
Key aspects of H.R. 3221 include:
- Nearly $4 billion in Community Development Block Grants for communities to purchase and rehabilitate foreclosed properties in hard-hit areas, and return affordable housing to those who need it most, while reducing urban blight, safety hazards, and drains on limited local resources in the process;
- The creation of an Affordable Housing Trust Fund to provide affordable rental housing for people who need it the most;
- A new nationwide licensing and registration system for loan originators that will greatly improve the oversight of a brokerage system that, in many cases, has been a major contributor to the scourge of predatory lending tactics; and
- Expanded authority for the Federal Housing Administration to help borrowers refinance into more affordable loans.
As is the case with any omnibus legislation on such a complex issue, many difficult compromises and decisions were made in the name of moving forward. On the whole, however, the NAACP believes that the bill will do far more good than harm. Our primary concern with H.R. 3221 is in what it does not include: reforms that level the playing field between borrowers and lenders. Sadly, this legislation does not address the fact that lenders currently hold all of the cards when dealing with struggling homeowners. Specifically, the NAACP currently supports legislation (H.R. 5670) to require that mortgage servicers work with borrowers to try to avoid foreclosure, as well as a bill (H.R. 6076) to impose a cooling out period to allow homeowners time to try to modify their mortgages and stay in their homes and legislation (H.R. 3609) allowing the courts to try to mediate a modification. Such mandatory foreclosure prevention policies remain absolutely vital to resolving our nation’s foreclosure crisis.
So now we must congratulate our elected representatives on the legislation about to become law, but also urge them to go further and to pass legislation to level the playing field between homeowners facing foreclosure and lenders.