Neighborhood Preservation Act

NEIGHBORHOOD PRESERVATION ACT -- (House of Representatives - July 29, 2009)

BREAK IN TRANSCRIPT

Mr. DONNELLY of Indiana. Mr. Speaker, today I rise in strong support of H.R. 2529, the Neighborhood Preservation Act, which I joined my colleague from California, Mr. Gary G. Miller, in introducing.

This bill would amend The Federal Deposit Insurance Act to allow depository institutions like banks to temporarily lease a foreclosed property for up to 5 years. This bill is a fiscally responsible way to help mitigate the damage of the housing crisis and does not cost the government any money. The President has recently spoken in support of this idea. We hope that banks will utilize this to mitigate damage to hard-hit communities and prioritize working with the foreclosed family first.

My home State of Indiana ranks 13th in the country for number of foreclosures. Our district has felt the pain of the economic downturn, as many have lost jobs and struggled to make ends meet. Like many Americans, we have found ourselves unable to pay our mortgages and faced with foreclosure, and that is what has happened to many families in our district.

When a bank is forced to foreclose on a home, many people suffer. The family suffers as they are forced to find a new place to live and new schools for their children. One foreclosure can depress an entire neighborhood by decreasing the values of surrounding properties, and the depository institution that holds the mortgage no longer receives payments on the home. H.R. 2529 would help to minimize the impact of foreclosure by allowing depository institutions to rent a foreclosed property for up to 5 years to the previous owner or to another owner. Allowing depository institutions to lease the foreclosed property gives families a chance to stay in their home and to make payments as a renter until they have the means to become an owner again. It does so without adding any cost to our deficit. Not only does this help provide some relief to the former homeowner, it helps to preserve the economic values of surrounding homes in the neighborhood, and it provides stability in the housing market. The number of foreclosed homes on the market have contributed to an oversupply of unoccupied homes. Having a high number of unoccupied bank-owned homes negatively impacts whole communities and can even drive up crime, as these vacant homes can become havens for squatters. There are 19 million vacant homes across the United States. That's up from 15.7 million only 4 years ago. These homes present a number of safety concerns. By allowing a family to reside as a renter, they're able to care for the property and prevent further adverse consequences. This bill is a temporary measure that can serve as a useful tool to keep excess housing stock off an already saturated market.

I want to thank the gentleman from California for his work on H.R. 2529, and I'd like to thank Chairman Frank and Ranking Member Bachus for their support on this important piece of legislation. I urge my colleagues to support H.R. 2529.

BREAK IN TRANSCRIPT

Source