NeighborWorks America Supports Sweeping Housing Legislation

Posted by RealEstateRama

August 1, 2008

WASHINGTON, D.C. - July 31, 2008 - (RealEstateRama) — NeighborWorks America applauds the efforts of the United States Congress and President Bush on enactment of the American Housing Rescue and Foreclosure Prevention Act of 2008. One of the most sweeping pieces of housing legislation since the Great Depression, the law outlines many efforts and initiatives that will help prevent foreclosure now and in the future through funding for foreclosure counseling and community stabilization in the hardest-hit markets, a modernized Federal Housing Administration (FHA), and support for Fannie Mae and Freddie Mac, which hold about half of the nation’s mortgage debt.

Foreclosure counseling
Community-based counseling provided by HUD-approved housing counselors continues to be an important resource for homeowners in danger of losing their homes to foreclosure.

As part of the new housing law, NeighborWorks America will receive $180 million to award as grants through the National Foreclosure Mitigation Counseling program to state housing finance agencies, HUD-approved housing counseling intermediaries and community-basedNeighborWorks organizations, to provide counseling to families and individuals facing the threat of foreclosure. Thirty million dollars in grants may be provided to housing counseling intermediaries to hire attorneys to provide legal counseling to assist homeowners in foreclosure. It is estimated that more than 350,000 families facing the threat of foreclosure will be directly assisted by counseling with this new funding.

“We thank Congress for the confidence it has displayed in NeighborWorks America by appropriating this new funding and naming NeighborWorks America the administrator of the National Foreclosure Mitigation Counseling Program,” said Ken Wade, CEO of NeighborWorks America.

In December 2007, NeighborWorks America was asked by Congress to administer $180 million in grant funding through the National Foreclosure Mitigation Counseling program. Initially Congress required that NeighborWorks America award $50 million within 60 days; NeighborWorks America exceeded that objective by awarding $130 million to state housing finance agencies, HUD-approved counseling intermediaries, and community-based NeighborWorks organizations within the specified timeframe. A second pool of $37.8 million will be distributed along with this second round of funding for foreclosure counseling by December 31, 2008.

As the nation’s largest certifier of homeownership counselors, NeighborWorks America trained over 3,300 foreclosure counselors in the last four years. In 2008, NeighborWorks expects to train an additional 3,000 foreclosure counselors through forty place-based trainings around the country, an online course on foreclosure counseling fundamentals, and four NeighborWorks Training Institutes. The next NeighborWorks Training Institute will be held in Chicago, August 18-22, 2008.

Neighborhood stabilization
We support the $3.92 billion in CDBG funds made available to communities in the hardest-hit areas so that homes may be purchased, rehabilitated, and either sold or rented to moderate-income individuals and families.

Moving empty homes back into productive use is something that government, nonprofits and lenders must more urgently address. Foreclosed properties reduce the value of the surrounding homes, increasing the urgency of action because inaction hurts all homeowners.

NeighborWorks America has already sponsored pilot neighborhood stabilization programs in a number of cities around the country that involve the private sector, nonprofits, and government partnerships, and engaged with other nonprofits to raise money to facilitate the return of vacant housing back into productive use.

FHA modernization
NeighborWorks America has always supported a robust FHA. A modernized FHA that is able to work with an increased loan limit of $625,000 (from $417,000) has more flexibility in helping homeowners in costly areas. In addition, the mortgage refinance product introduced in the new housing law will provide an alternative to the problematic mortgage products that have contributed to the current national foreclosure crisis, and can lead to a stronger housing market. The new refinance product is expected to help 400,000 homeowners at risk of foreclosure trade in the high-cost loans for more affordable fixed-rate mortgages backed by FHA.

Fannie Mae and Freddie Mac
As the holders of about half the outstanding mortgages in the United States ($5.3 trillion in mortgage debt), a strong Fannie Mae and Freddie Mac help keep mortgage rates lower and more attainable for all homeowners. NeighborWorks America supports a new regulator and strengthened oversight of the GSEs, as well as an increase in the existing line of credit available to both Freddie Mac and Fannie Mae.

For more information, please contact Erin Angell Collins, 202-220-6317 and eangell@nw.org or Douglas Robinson, 202-220-2360 and drobinson@nw.org.
About NeighborWorks America
NeighborWorks America creates opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. Since 1991, we have assisted nearly 1.2 million low- to moderate-income families with their housing needs. Much of our success is achieved through our support of the NeighborWorks network ― more than 230 community development organizations working in more than 4,400 urban, suburban and rural communities in all 50 states, the District of Columbia and Puerto Rico. In the last five years, NeighborWorks organizations have generated more than $15 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals. www.nw.org.

Contact:
Erin Angell Collins, 202-220-6317, ecollins@nw.org
Douglas Robinson, 202-220-2360, drobinson@nw.org

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