Congressman Crowley Applauds Passage of House Plan to Address Housing Crisis, Mortgage Foreclosures

Press Release

Congressman Crowley Applauds Passage of House Plan to Address Housing Crisis, Mortgage Foreclosures

Legislation will assist homeowners nationally and work to reduce the estimated 125,000 foreclosures in New York State this year

Congressman Joseph Crowley (D-Queens,Bronx), member of the House Committee on Ways and Means, applauded today's passage of bipartisan legislation to deliver relief to millions of struggling homeowners across the nation. The American Housing Rescue and Foreclosure Prevention Act of 2008 (H.R. 3221) and the Neighborhood Stabilization Act of 2008 (H.R. 5818) respond to the growing national housing crisis by helping homeowners stay in their homes with affordable mortgages, reducing foreclosures, and protecting those people living in communities with high foreclosure rates retain their home values and keep their communities vibrant. The bill also includes important language to provide a new "First Time Home Buyers Tax Credit", new incentives for low income housing development, a new tax deduction for property taxes, and other incentives to spur new housing investment.

"Homeownership is one of the keystones of the American Dream, and thousands of families in Queens and the Bronx are on the brink of losing their homes and their investment in a better future," said Congressman Crowley. "The national housing crisis affects is affecting all of us - from a stagnant national economy to plummeting neighborhood housing values. In New York State alone, we face an estimated 125,000 foreclosures this year alone - more than double from 2007, with communities like Jackson Heights, Sunnyside, East Elmhurst, Corona and the Northeast Bronx suffering the highest rates in my district. This staggering number translates into an estimated $65 billion in property losses for the 3.5 million homeowners in New York affected by foreclosures in their neighborhoods. While President Bush has ignored the housing crisis and is threatening to veto this bipartisan legislation, I am proud that the Democratic-led Congress has crafted a plan that will both help to end this housing crisis and stabilize our faltering economy."

The American Housing Rescue and Foreclosure Prevention Act of 2008 will provide mortgage refinancing assistance, which will help keep families from losing their homes and protect neighboring home values. The plan also expands programs run by the Federal Housing Administration (FHA) that will allow borrowers in danger of losing their home to refinance into lower-cost government -insured mortgages they can afford to repay.

The plan is not a bailout and requires both homeowners and lenders to take responsibility. In order to qualify for refinancing and a new government backed mortgages, lenders and mortgage investors will be required to take a loss and borrowers must share any profit from the resale of a refinanced home with the government. Additionally, the new plan is open only to owner-occupied homes. Speculators, investors and vacation/second-home owners are not eligible.

The House also passed the Neighborhood Stabilization Act of 2008, which provides $15 billion in loans and grants to states to acquire vacant, foreclosed homes. The legislation will allow local communities to rehabilitate foreclosed properties, which currently drive down surrounding home properties, and place these homes back on the market.

"This important housing legislation doesn't just help those at risk of losing their home, but everyone living in an affected community. Foreclosed homes are a blight to a neighborhood, and this plan helps communities fight the recurrence of the broken window syndrome that we have fought so hard against for so long in Queens and the Bronx," said Congressman Crowley."

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