The U.S. Department of Housing and Urban Development (HUD) this week kicked off National Homeownership Month by recognizing the critical role owning a home plays in communities across America. "Preserving the Dream" is the theme of this month-long recognition and it reinforces the Obama Administration's work to build a more durable and fair housing finance system that promotes the American Dream of homeownership while preventing the unsustainable forms of home purchase that fueled the recent housing crisis.
When President Obama took office in 2009, the nation's housing market was in free-fall, leaving many families trapped and anxious about their mortgages. Today, the housing market is in recovery as homeowner equity is more than $10 trillion, foreclosure starts are at their lowest levels since 2005, and American families are on pace to purchase more than five million homes this year.
"Homeownership Month is a time to reaffirm the important role that "home' plays for our families and the neighborhoods where they live," said HUD Secretary Shaun Donovan. "Owning a home has historically been the principal vehicle for Americans to build equity, start businesses, put kids through college, and retire with comfort and dignity. After all we've been through, we must stand by an institution that has helped build our nation's middle class."
Responsible and sustainable homeownership is part of a number of measures the Obama Administration is promoting to build ladders of opportunity for middle class American families. Others include:
Seeking an increase in the minimum wage to make certain no person who works full-time lives in poverty;
Enhancing training programs to help Americans get the skills to get jobs in the 21st century economy; and
Promoting increased investment in the nation's aging infrastructure while stimulating job growth and allowing working families to improve their living conditions.
HUD is also taking concrete steps to increase access to mortgage credit. This spring, the Federal Housing Administration (FHA) issued its "Blueprint for Access,"outlining the additional steps the agency is taking to expand access to credit for underserved borrowers. These steps include enhancing FHA's quality assurance processes and encouraging a broader use of housing counseling through the Homeowners Armed with Knowledge (HAWK)program. By clarifying quality assurance policies, FHA seeks to encourage lenders to make loans to a broader range of qualified, underserved borrowers. Under the HAWK pilot program, homebuyers who commit to housing counseling will qualify for tangible savings on their FHA-insured loans. The average buyer would save approximately $325 a year -- or nearly $10,000 over the life of their loan. By completing HUD-approved housing counseling provided through independent nonprofit organizations, people will be given the tools they need to understand the rights and responsibilities of homeownership.
The third step of preserving homeownership as a key aspect to the "American Dream" is securing it for generations to come. As part of the historic $25 billion National Mortgage Servicing Settlement announced last year, the Administration and 49 state Attorneys General negotiated with the nation's largest mortgage servicers to address loan servicing and foreclosure abuses. The agreement provides substantial financial relief to homeowners and establishes significant new homeowner protections for the future.
Along with these steps, the Administration supports Congressional efforts to bring both responsibility and opportunity back to the market through the Housing Finance Reform and Taxpayer Protection Act of 2014 passed through the Senate Banking Committee in May 2013. Under the current structure, low wealth families and minority communities are not getting mortgages while taxpayers remain on the hook for potential losses in the housing market. This bill represents an important step forward in helping families who are ready to buy a home.