Congresswoman Waters Announces New Foreclosure Legislation

Congresswoman Waters Announces New Foreclosure Legislation

(from the National Alliance of Community Economic Development Associations) The Chairwoman of the House Housing & Opportunity Subcommittee announced two targeted and pragmatic pieces of legislation today at a National Policy and Capacity Building Conference on Capitol Hill before members of the National Alliance of Community Economic Development Associations (NACEDA), whose members are integral facilitators in solving the country's foreclosure crisis.

Although mortgage servicers say they want to stay foreclosures, the rates keep rising, Congresswoman Maxine Waters said, as a rational for her legislation. Once borrowers get into trouble, they often cannot find anyone to deal with at their mortgage company, she said. With this legislation "we want to make it as easy for the homeowner to get help once they are in trouble, as it was to get the loan in the first place," she added.

"We are honored that Congresswoman Waters chose us to come and announce this important legislation dealing with community development and foreclosure," said NACEDA Policy Committee Co-Chair Terry Chelikowsky. "It shows that she views community development corporations (CDCs) as part of the solution to this growing crisis." Chelikowsky is also Executive Director of the Florida Alliance of CDCs.

Community Development Corporations: Part of the Solution

The two pieces of legislation, which Waters plans to introduce today, are: the Foreclosure Prevention and Sound Mortgage Servicing Act and the Neighborhood Rescue and Stabilization Act. One of the goals in the first bill is to keep homeowners in the home, Waters said. We need a sound approach that must include resources and partnerships with organizations like CDCs, she added.

The act would also require mortgage servicers to forward a borrower's information to a HUD certified counselor if they are more than 60 days delinquent on a loan. CDCs would be an important partner in this effort. NACEDA's members, the state associations of CDCs, are currently helping to solve the foreclosure crisis by counseling distressed homebuyers, as well as actively trying to revitalize foreclosed vacant properties to be used for affordable housing.

Among the key efforts of the Neighborhood Rescue and Stabilization Act:

• Targeted assistance to the communities that are hardest-hit by the foreclosure wave;
• Maximum flexibility in the use of federal resources; and
• It ensures that the poorest and most-housing cost burdened will not be left out.

"It is nice to see Congress recognizing the issues and hardships facing community development," said NACEDA Policy Co-Chair Chris Hannifan, also Executive Director of the Housing Network of Rhode Island. "We are so pleased that Rep. Waters and others have stepped up to the plate with important legislative initiatives that address the issues we face daily."

NACEDA Executive Director Jane DeMarines said a federal legislative response to the foreclosure situation is imperative, as foreclosures have passed the 1 million mark and expected to pass 2 million by the end of 2009. "We know the problem is going to worsen before it improves and CDCs are trying to prevent more foreclosures while helping many low income communities deal with the problem of increasing vacant properties."

Because CDCs are experts in land acquisition, their expertise is coming into greater play daily, as the nation wrestles with the growing impact from foreclosure, DeMarines added.