Hare Supports Comprehensive Plan to Address the Housing Crisis
Congressman Phil Hare (D-IL) today took strong action in response to the housing crisis by voting for key legislation that will help improve home values and assist Americans that are in danger of foreclosure. The American Housing Rescue and Foreclosure Prevention Act of 2008 and the Neighborhood Stabilization Act of 2008 were both approved with bipartisan support.
"I experienced the pain of losing a home growing up," Hare said. "It can devastate a family. This legislation will provide help to the hundreds of thousands of Americans currently at risk of foreclosure because of predatory lenders and speculators."
The housing crisis has had a significant impact in Illinois. One in 38 homeowners is projected to lose their homes to foreclosure over the next two years. Homeowners who do not lose their homes have also been hurt by the crisis. The Pew Charitable Trusts estimates that 60% of all Illinois homeowners will feel the ripple effects of the housing crisis. The crisis could also cost state and local tax bases $27.3 billion.
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.
"Today the House fulfilled its obligation to stand up for Americans who are in danger of losing their homes through no fault of their own," Hare concluded.