Mr. Chair, I rise today to oppose this spurious legislation to eliminate a program that has helped our towns and cities recover from the horrible housing crisis that has taken hold of these communities. The intent of this program which I…
Mr. Chair, I rise today to oppose this spurious legislation to eliminate a program that has helped our towns and cities recover from the horrible housing crisis that has taken hold of these communities.
The intent of this program which I voted for was to stabilize neighborhoods. The legislation allowed hard-working American families in danger of losing their homes to refinance into lower-cost government-insured mortgages they can afford to repay.
I was able to hold foreclosure workshops in cities and towns throughout my district to help these families at risk of losing their homes. With my community's help, many families were able to stay in their homes, keeping neighborhoods intact.
I believe that more money should be used to keep people in their homes. To the administration's credit, they attempted to create other programs that would do that. The Republican majority has spent the last weeks attempting to eliminate those programs also.
The intent of the NSP legislation, begun more than three years ago, was to quickly and efficiently distribute funds to neighborhoods and communities that have a large number of foreclosed, vacant, or bank- owned properties. The local government's goal should be to utilize the funds to secure communities and neighborhoods that have unique needs as a result of the foreclosure crisis.
The use of non-governmental agencies in the NSP program was innovative. HUD could have further been innovative and used rent to own to keep people in their homes.
NSP also seeks to prevent future foreclosures by requiring housing counseling for families receiving homebuyer assistance. HUD seeks to protect future homebuyers by requiring States and local grantees to ensure that new homebuyers under NSP receive homeownership counseling and obtain a mortgage loan from a lender who agrees to comply with sound lending practices.
Defeat this legislation and vote to keep people in their homes and our communities living and vibrant.
I would like to submit this article from the Florida Times-Union into the Record about the amount of Jacksonville homes underwater.
[From the Florida Times-Union, March 8, 2011]
Nearly Half of Jacksonville Home Mortgages Underwater at End of 2010
(By Kevin Turner)
March 8.--Nearly half of mortgages residences in
Jacksonville were underwater at the end of 2010--47 percent--
primarily because their values have sunk below the amount
their owners owe on their mortgages.
The phenomenon is also known as ``negative equity.''
According to real estate data aggregator CoreLogic, another
4.8 percent of all mortgaged Jacksonville mortgages were in
``near negative equity'' status, or owed the same or nearly
the same as much as their homes were worth.
Combined, 51.8 percent of Jacksonville homes are underwater
or nearly so, according to a report released today by real
estate data aggregator CoreLogic.
Although sinking values are thought to be the chief cause,
increases in mortgage debt are also a factor, CoreLogic
noted.
The local combined underwater percentage is significantly
higher than the national average of 27.9 percent of mortgaged
homes nationwide that are underwater or near underwater. Some
23.1 percent were fully underwater.
The difference in the statistic locally and nationally
underscores the lingering effects of bursting of the real
estate value bubble in hardest-hit Florida, Nevada, Arizona
and California.
The Associated Press also reported:
Nationally, the number of Americans who owe more on their
mortgages than their homes are worth rose at the end of last
year, preventing many people from selling their homes in an
already weak housing market.
The percentage of homes underwater at the end of the fourth
quarter, at 23.1 percent, was up from 22.5 percent, or 10.8
million households, in the third quarter.
The number of underwater mortgages nationally had fallen in
the previous three quarters, mostly because more homes had
fallen into foreclosure.
Underwater mortgages typically rise when home prices fall.
Home prices in December hit their lowest point since the
housing bust in 11 of 20 major U.S. metro areas. In a healthy
housing market, about 5 percent of homeowners are underwater.
About 2.4 million people have only 5 percent equity or less
in their homes, putting them near the tipping point if prices
in their area fall.
Roughly two-thirds of homeowners in Nevada with a mortgage
had negative home equity, the worst in the country. Arizona,
Florida, Michigan and California were next, with nearly 50
percent of homeowners with mortgages in those states
underwater.
Oklahoma had the smallest percentage of underwater
homeowners in the October-December quarter, at 5.8 percent.
Only nine states recorded percentages less than 10 percent.
When a mortgage is underwater, the homeowner often can't
qualify for mortgage refinancing and has little recourse but
to continue making payments in hopes the property eventually
regains its value.
The slide in home prices began stabilizing last year. But
prices are expected to continue falling in many markets due
to still-high levels of foreclosure and unemployment.
That means homes purchased at the height of the real estate
boom are unlikely to recover lost value for years.
Underwater mortgages also dampen home sales. Homeowners who
might otherwise sell their home refuse to take a loss or
can't get the bank to agree to a short sale--when a lender
lets a borrower sell their property for less than the amount
owed on the mortgage.
Home sales have been weaker in areas where there are a
large number of homeowners with negative equity.
The total amount of negative equity increased to $751
billion nationwide, up from $744 billion in the previous
quarter.