KERRY, FRANK, LANG, MASSHOUSING ON HOW HOUSING BILL WILL BENEFIT MASSACHUSETTS HOMEOWNERS
Senator John Kerry, New Bedford Mayor Scott Lang and the Executive Director of Mass Housing, Tom Gleason toured a New Bedford neighborhood earlier today and discussed how the newly signed Housing Bill will benefit Massachusetts homeowners.
The bill contains four key provisions, introduced by Kerry, which will help thousands of Massachusetts homeowners survive the nation's unstable housing market.
"This new law will help ease the dramatic increase in foreclosures devastating families in New Bedford and across Massachusetts by providing much needed assistance for those facing foreclosure and increased access to safe and fair mortgages. It will help families avoid foreclosure and get back on their financial feet," said Senator Kerry.
Congressman Barney Frank, Chairman of the House Financial Services Committee, was integral in developing the legislation in the House.
"I am especially proud of the cooperation between the Financial Services Committee and the House Ways and Means Committee and our counterparts in the Senate which produced legislation that will do more for affordable housing than anything passed in decades. I am very pleased to include this badly needed housing funding in the omnibus bill we passed," said Congressman Barney Frank.
New Bedford Mayor Scott W. Lang said, "I appreciate Senator Kerry, Congressman Frank and our entire legislative delegation continuing to advocate for changes in legislation that will provide relief to homeowners in cities and towns across the Commonwealth, including New Bedford, that are facing many challenges that stem from the national mortgage foreclosure crisis."
"I commend Senator Kerry and Congressman Frank for their tireless efforts to pass this sweeping housing legislation," said Tom Gleason, Executive Director of MassHousing. "These new federal programs, coupled with the foreclosure prevention initiatives put forward by Governor Patrick's administration, will be critical to efforts to stabilize the housing market and create new affordable housing opportunities."
Nationwide as many as 8,100 home foreclosures will devastate the lives of families across the United States today alone. Almost one in every 11 homes either are in default or in foreclosure, the highest level since 1979. Massachusetts is on track to more than double the number of foreclosures this year than last year. For the first half of the year, Massachusetts home sales declined more than 19 percent and prices fell more than 9 percent compared with the first half of 2007. Five Massachusetts metro areas have foreclosure rates in the nation's top 100.
The City of New Bedford is facing an 80 percent increase in foreclosures during the first five months of this year. There were more than 143 foreclosures sales in New Bedford through May 31st. There were 190 foreclosure sales in New Bedford for all of 2007.
Four key provisions introduced by Senator Kerry included bill:
* Kerry worked with Senator Gordon Smith (R-Oregon) to include the Mortgage Revenue Bond Provision, which provides an additional $11 billion of tax-exempt private activity bonds to housing finance agencies. The provision would allow the proceeds from the bonds to be used to refinance subprime loans, provide mortgages for first time homebuyers and for multifamily rental housing. This means that approximately $209 million in targeted mortgage relief will be available to the homeowners of Massachusetts, which could result in as may as 1,000 new loans in Massachusetts. Nationwide this would result in close to 87,000 additional loans.
* The bill establishes a National Affordable Housing Trust Fund, which requires Fannie Mae and Freddie Mac to set aside a portion of their profits of which, 65 percent will be used for the Housing Trust Fund (approximately $3.4 billion over ten years), and 35 percent will go toward a Capital Magnet Fund to leverage affordable housing development and community development activities. Senator Olympia Snowe (R-Maine) introduced the bill along with Kerry.
* The bill also contains provisions to amend the Service Members Civil Relief Act (SCRA) by extending the period a lender must wait before starting disclosure procedures from 90 days to nine months after a service member has returned from active duty and capping interest on mortgages at 6 percent for one year after a serviceperson completes his/her services.
* The bill includes $3.92 billion for the Community Development Block Grant (CDBG) program which will help local communities fight the effects of foreclosure. Earlier this year, Kerry, along with Senator Edward Kennedy, sent a letter to the Senate leadership underscoring the need for $2 billion in additional funding for CDBG in the upcoming housing legislation.