House Passes Housing Rescue Package with Funding Sought by Rep. Waters
Congresswoman Maxine Waters (D-CA) celebrated House passage today of comprehensive housing legislation that will help American families facing foreclosure remain in their homes, prevent future foreclosures and assist communities impacted by foreclosures.
The legislation includes $4 billion in funding for states, counties and cities to stabilize neighborhoods. Congresswoman Waters, who chairs the Financial Services Subcommittee on Housing and Community Opportunity, has been the leading advocate for funding to assist communities hit hardest by the national foreclosure crisis. Although President Bush had threatened to veto it, causing some Members of Congress to consider passing a bill without neighborhood stabilization funds, she insisted that such funding be a part of the comprehensive housing package.
"I have worked with the Congressional Black Caucus (CBC), governors, mayors, and housing advocacy groups to highlight the importance of providing assistance to communities where foreclosures have caused declining home values, blight and crime. We were confident that the President would drop his veto threat in the face of such strong support. He needed our help to pass the reforms related to Fannie Mae and Freddie Mac, but he could not expect to get the votes of CBC members and other Democrats who represent affected urban areas with high foreclosure rates unless he accepted the inclusion of neighborhood stabilization funding," said Congresswoman Waters.
In addition, the legislation includes measures to modernize the Federal Housing Administration (FHA), another priority of Congresswoman Waters. She introduced the Expanding American Homeownership Act (H.R. 1852) to provide FHA the tools and resources needed to allow it to assist more low-income homebuyers. The House overwhelmingly passed her legislation last year and again earlier this year as part of the original version of the housing rescue package.
"Including FHA modernization in this legislation today is essential because FHA is the only national agency with the capacity and expertise to assist the nation's homeowners on a large scale," she said. "FHA had become obsolete in California and other parts of the country because of its low loan limits, outdated rules and slow bureaucracy. Many low-income homebuyers therefore had little choice but to turn to the subprime mortgage market for assistance. We have taken a significant step by modernizing FHA."
Having seen the effect of the subprime mortgage meltdown on neighborhoods in Los Angeles, throughout California and across America, Congresswoman Waters introduced the Neighborhood Stabilization Act (H.R. 5818), which authorizes a federal grant and loan program to help state and local governments purchase, rehabilitate, and resell or rent foreclosed homes and in turn create rental and ownership opportunities for low- and moderate-income families.
The House passed her legislation earlier this year, but neighborhood stabilization funding was not originally included in H.R. 3221, the housing legislation taken up by the Senate. Bolstered by housing advocacy groups, Congresswoman Waters impressed upon her Congressional colleagues that the foreclosure crisis was a true emergency and imposed a significant burden on state and local governments. (A list of organizations supporting emergency stabilization funding as Congresswoman Waters proposed can be found at www.saveamericasneighborhoods.org)
She worked with Senate Banking Committee Chair Chris Dodd, House Financial Services Committee Chair Barney Frank and Speaker Nancy Pelosi to ensure that the comprehensive housing rescue and mortgage prevention legislation included neighborhood stabilization funding.
The foreclosure crisis, fueled by subprime mortgages, has resulted in significant property revenue losses for states, counties and local governments. Because many state and local governments must balance their budgets each year, 20 states have already had to make or are proposing budget cuts due largely to revenue losses. These budget cuts further harm the economy and deepen the recession.
Despite severe fiscal constraints, many states and cities are already dedicating their own shrinking tax revenues to purchase foreclosed properties and stabilize neighborhoods. However, states and cities are overwhelmed by the scale of the housing foreclosure problem and unable to adequately respond without federal assistance. As a result, governors, mayors and county legislators support federal funding to help acquire and rehabilitate foreclosed properties.
Passing legislation that included emergency neighborhood stabilization funding has been a priority for Congresswoman Waters and fellow CBC Members. They have emphasized that while the foreclosure crisis has hurt many communities across the nation, African-American and Latino neighborhoods have been disproportionately affected because minority communities were targeted for high cost, predatory subprime loans.
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