Sens. John Kerry (D-Mass.) and Gordon Smith (R-Ore.) pushed for Senate passage of their Mortgage Revenue Bond proposal today, which would provide an additional $10 billion of tax-exempt private activity bond authority to be used to refinance subprime loans, providing thousands of mortgages for first-time homebuyers, and multifamily rental housing.
"Washington needs to show the same commitment to Main Street Americans struggling to keep their homes as it has to the big lenders on Wall Street," said Kerry. "By including $10 billion in targeted mortgage help, we are delivering relief to those who need help the most. With an expansion of the mortgage revenue bond program, our bill would keep more families facing foreclosure in their homes and help first-time homebuyers get a safe, fair mortgage."
"Owning a home should provide stability, not uncertainty and stress," Smith said. "Refinancing options will help families stay in their homes and keep neighborhoods on solid footing. Steadying housing prices will help steady the economy. Action is not just prudent, it is necessary."
At a time when families across the nation desperately need help to avoid foreclosure, these funds will provide thousands of safe, fair mortgages to homeowners facing foreclosure and families looking for their first home. In Massachusetts alone, the National Association of State and Local Housing Finance Agencies estimates that 1,110 new loans could be provided. Nationally, it could result in almost 80,000 new loans. For Oregon, the increased bond cap will translate to roughly $122 million in new bond authority to address the state's housing needs.
Approximately 1.7 million subprime ARMs worth $367 billion are expected to reset during 2008 and 2009. According to the National Association of Home Builders, every new mortgage revenue bond home loan produces almost two full-time jobs, $75,000 in additional wages and salaries and $41,000 in new federal, state and local revenues. Also, each new home loan results in an average of $3,700 in new spending on appliances, furnishings, and property alterations.