Congresswoman Corrine Brown Backs Plan to Address Housing Crisis

Press Release

Congresswoman Corrine Brown today responded to the housing crisis that has proven to be one of the most serious underlying causes of our nation's current economic recession and backed key legislation that will help improve home values and assist Americans who are struggling with the housing and credit crises and in danger of losing their homes. The American Housing Rescue and Foreclosure Prevention Act of 2008, and the Neighborhood Stabilization Act of 2008 were approved today by the House of Representatives.

"Increasing loan rates on sub prime mortgages have left thousands of American families close to foreclosure, and this crisis has led to the worst slump in the housing market in 16 years," said the Congresswoman.

"I truly believe that achieving the goal of owning a home is a dream for all Americans, yet because of the crisis, hundreds of thousands of Floridians are at risk of losing their homes and turning into victims of the housing crisis," said the Congresswoman. "Along with my colleagues in the House, I am proud that we have come up with a plan that will help struggling homeowners."

The housing crisis has had a significant impact in Florida. Nearly 200,000 homes in the state of Florida were in foreclosure last year, and this number will likely continue to increase this year. And even homeowners who do not wind up losing their homes have also been hurt by the crisis, as nearly all Florida homeowners will feel the ripple effects of the housing crisis. Moreover, the crisis could cost state and local tax base a total of $36 billion.

The American Housing Rescue and Foreclosure Prevention Act of 2008 will begin to provide relief to those suffering from this crisis by providing 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 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.

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