Sen. Voinovich Statement on Obama Administration Housing Announcement
U.S. Senator George V. Voinovich (R-OH) released the following statement on today's announcement by the Obama Administration to include Ohio in the expansion of the TARP-funded housing assistance program, created in February. The program, known as the Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, was restricted to the five states with the greatest fall in average home values:
"I am pleased that the Obama Administration has opted to rectify its exclusion of Ohio from the housing assistance program. It is vital that struggling Ohioans receive the opportunity to apply for the same aid given to the first group of states selected for the program. While this program will exclude many of Ohio's major metropolitan areas, it is a step in the right direction.
"In March, I wrote a letter to U.S. Treasury Secretary Timothy Geithner outlining Ohio's housing assistance needs and the effect the national foreclosure situation has had on Ohio. I expressed my deep concern and strongly urged the Obama Administration to reconsider and expand the criteria for its new housing assistance program -- which excluded Ohio-- to include more relevant and telling factors of a state's homeownership problems. I am glad they took my letter into consideration and have expanded this program.
"I hope this assistance will reach my constituents in a swift and timely manner and I hope the Administration will continue the expansion to the major metropolitan areas of Ohio -- as all Ohioans need assistance."
March 2, 2010
The Honorable Timothy Geithner
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Ave. NW
Washington, D.C. 20220
Dear Secretary Geithner,
I was disappointed that President Obama's new plan to provide $1.5 billion in housing assistance from Troubled Asset Relief Program (TARP) funds excludes the state of Ohio. To date, I have not heard a satisfactory rationale for the criterion chosen by the Administration which excludes states like Ohio, which are also suffering.
This exclusion has resulted in confusion, concern, and resentment from elected officials, housing agencies and organizations, and some of my constituents throughout the state. Given Ohio's longstanding foreclosure problem that pre-dates the recent and more widespread turmoil in the housing market, these individuals and groups believe, as do I, that Ohio should take part in this new program. In fact, according to recent testimony before the Domestic Policy Subcommittee of the House Committee on Oversight and Government Reform, Cuyahoga County led the country in foreclosures from 2000 to 2006. While other communities surged ahead to take the lead when the housing bubble burst in late 2006, the problem continued steadily in Ohio outside of the spotlight.
According to the Mortgage Bankers Association, Ohio ranks seventh in the nation in the percentage of foreclosures on existing loans, and approximately one in every six mortgage holders in Ohio is past due or in foreclosure. Ohio also faces extraordinary challenges due to the decline of many of its manufacturers, which began well in advance of other parts of the country. This well known decline, which has specifically harmed the auto and steel industries as well as the many companies that supply and support them, has resulted in a steady and disturbing rise in Ohio's foreclosure rate that continues unabated. Given these challenging circumstances, Ohio's working families need the same sort of assistance given to states with different fluctuations in related asset values.
I believe it is a mistake to formulate such an important federal policy response to the foreclosure disaster by primarily referencing home values as the benchmark of distress. It seems to reward those states where property speculation was most prevalent, but more importantly, it fails to capture the human dimension of suffering across the country.
The recently released negative equity report for the fourth quarter of 2009 from First American CoreLogic measures the number of homeowners in each state who are underwater on their mortgages. Ohio ranks sixth nationally in the number of home-owning families now, or near, underwater. According to First American CoreLogic, Ohio has 578,462 households that for all practical purposes owe more money on their home than it is worth. These families are truly "foreclosures waiting to happen," because they are tied down by their mortgages and trapped when unemployment or other economic emergencies come along. They cannot move to make geographic or economic adjustments to improve their situation, and to that extent, they are as "tied to the land" as medieval serfs.
When the focus is placed primarily on the families who are in trouble, other priorities surface. Measuring the number of homeowners who are underwater, Nevada actually ranks ninth nationally, behind Texas, Ohio, Illinois, and Georgia. What exactly is the Administration trying to accomplish with an infusion of federal dollars? Is it not to stabilize the larger economy, and will not that goal ultimately be achieved by restoring strength to the families who support--who are--the nation's consumer base?
I know that the Obama Administration as well as the Bush Administration has worked to build and preserve homeownership in Ohio and across the country through targeted and community-based programs, and I commend Ohio's housing support agencies and organizations for their sustained and extraordinary foreclosure prevention and counseling efforts across the state. But I strongly urge the Administration to reconsider and expand its criterion for the new aid to include more relevant and telling factors of a state's homeownership problems. While I recognize the deep economic troubles of states and communities across the nation, Ohio's families should not have to lose their homes because of a narrow exclusion that dismisses clear indicators of need.
I look forward to hearing more from you regarding the Administration's criterion, and I stand ready to work with you in any way I can to keep more Ohioans in their homes.
Sincerely,
George V. Voinovich
United States Senator