Congresswoman Maxine Waters Applauds President Obama’s Plan to Provide $1.5 Billion to Housing Finance Agencies to Help Homeowners and Stop Foreclosures

Congresswoman Maxine Waters (CA-35) today applauded President Obama's decision to provide $1.5 billion in funds to housing finance agencies in the five states most severely affected by the foreclosure crisis – California, Nevada, Arizona, Michigan and Florida.  The funds can be used for a number of programs that help mortgage borrowers, including programs championed by Congresswoman Waters that would assist unemployed homeowners in making their mortgage payments.

"As Chairwoman of the Subcommittee on Housing and Community Opportunity, I am pleased that the President has decided to take additional steps to help homeowners avoid foreclosure and support state programs similar to those I have advocated for in Congress," said Congresswoman Waters.  "Experience over the last year has demonstrated that current loan modification programs aren't doing enough.  This $1.5 billion is a good start towards advancing the legislation that I authored, and that the House passed last December, to provide $3 billion in additional assistance to homeowners at-risk for foreclosure," the Congresswoman said.

Congresswoman Waters led a group of Congressional Black Caucus lawmakers in securing $3 billion for unemployed homeowners under the Wall Street Reform and Consumer Protection Act of 2009, which passed the House of Representatives in December.  Under the legislation authored by Congresswoman Waters, homeowners nearing foreclosure, and with reduced income as a result of unemployment, underemployment or a medical condition, would be eligible to receive low-interest loans from the Department of Housing and Urban Development (HUD) to help them stay in their homes. 

The President's plan would allow the five state housing finance agencies to create new programs to help homeowners, based on the unique needs of their states.  It is likely that the housing finance agencies would adopt programs similar to the one Congresswoman Waters authored last December to assist unemployed homeowners nearing foreclosure.  Each of the five states targeted under President Obama's initiative have experienced above average rates of unemployment, along with home price declines of 20 percent or greater, relative to the height of the housing bubble.  The $1.5 billion will be allocated among the five states according to a formula based on home-price declines and unemployment.

"In California, one in every 21 homes received a foreclosure filing in 2009.  And the rate of homeowners falling behind on mortgage payments is more than 50 percent higher in my state compared to the nation as a whole.  In the Los Angeles metropolitan area, over 175,000 homes received a foreclosure filing last year.  It is clear that more resources are critically needed," said Congresswoman Waters.

Congresswoman Waters has led congressional efforts to address the needs of vulnerable homeowners and assist neighborhoods devastated by foreclosures.  The Congresswoman authored legislation to create the Neighborhood Stabilization Program (NSP), which helps cities and states fight foreclosures, home abandonment and blight and restore neighborhoods.  Congresswoman Waters secured $6 billion in funding for NSP, along with another $1 billion that passed the House under the Wall Street Reform and Consumer Protection Act of 2009.  Through two rounds of NSP funding, the City and County of Los Angeles have received nearly $210 million in grants.

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