Today, Congressman Dennis Cardoza (D-Merced) released the following statement in response the Federal Housing Finance Agency's (FHFA) new guidelines for the Home Affordable Refinance Program (HARP). The changes attempt to help homeowners who are "underwater" take advantage of the historically low interest rates.
"I have been fighting for a robust refinancing program since I introduced the Housing Opportunity Mortgage Equity (HOME) Act in 2009. Although the changes announced today by the FHFA are a step in the right direction, they do not go far enough. I am happy President Obama and the FHFA have decided to focus on the housing crisis, but we must have a much more aggressive plan to solve this problem.
"Currently, over 11 million homeowners nationwide are underwater, owing more than their homes are worth. The changes announced today are only expected to help an addition 800,000 to 1 million homeowners. This is not acceptable, and leaves too many families in dire straits.
"These changes are merely baby steps to addressing a far greater crisis than the President and his Administration are willing to admit. This revised plan doesn't do anything to compel banks to participate, which is one of the primary reasons the HARP program has failed. The new plan will also fail to help the hardest-hit areas like the Central Valley, where a new appraisal is impossible because the bottom has fallen out of the housing market. I urge President Obama to use this opportunity to make bolder changes and give American homeowners the help they need. Without a substantial plan to combat this epidemic, the economy and job market will continue to flounder."
California's Central Valley, the region Congressman Cardoza represents, has been ground zero in the foreclosure crisis. Over 53 percent are underwater and 70,000 have lost their homes to foreclosure since the crisis began in 2007. In 2009, Congressman Cardoza introduced the HOME Act, which would help up to 30 million struggling homeowners with mortgages backed by Fannie Mae or Freddie Mac to benefit from current historically low market interest rates and refinance for up to 40 years at a fixed single-digit rate. This would significantly lower the homeowner's monthly mortgage payments, resulting in fewer foreclosures, while stabilizing the housing market and the national economy.