Responding to the Foreclosure Crisis

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Responding to the Foreclosure Crisis

• Presented by Jeremy Rosen, Executive Director,
  National Policy and Advocacy Council on
  Homelessness.
• [phone]
• jrosen_at_npach.org
• www.npach.org

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Responding to the Foreclosure Crisis

• Key messages
• Despite everything you just heard, Congress and
  the Administration have mostly focused on big
  picture solutions to the crisis.
• No meaningful relief so far for homeowners with
  bad mortgages, or renters evicted because a
  landlord was foreclosed on.
• But there is some good news to discuss.
• And we have a strong 2009 Policy Agenda.

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Foreclosure Response

• Two bills Fannie Mae / Freddie Mac regulatory
  bill this summer (housing bill) Wall Street
  bailout bill this fall.
• The housing bill did two important things
• 4 billion neighborhood stabilization fund.
• National Housing Trust Fund.
• The bailout bill did only one thing bare
  bones language protecting renters.
• EFSP More .

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Neighborhood Stabilization

• 4 billion in Community Development Block Grants
  (CDBG) with special rules focused on using the
  money for purchase of foreclosed properties in
  blighted neighborhoods for rehabilitation and use
  as affordable housing.
• Communities are required to submit plans for
  using to HUD, by December 1.

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Neighborhood Stabilization

• could for example be used to rehab housing
  and put homeless families in it.
• Get involved some cities have real windfalls.
• HUD has info on how you can do this.
• http//www.hudhre.info/index.cfm?doviewNSP
• Unfortunately, NSP doesnt keep people in their
  homes.

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National Housing Trust Fund

• NHTF has been a long standing goal of affordable
  housing advocates (there are over 300 state and
  local trust funds).
• NHTF concept Get federal money, outside of the
  HUD budget, to pay for production, preservation,
  and rehabilitation of 1.5 million units of
  affordable housing over 10 years.
• Key idea dedicated source of funds.

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National Housing Trust Fund

• After nearly 10 years of trying, legislation
  finally passed in Summer, 2008.
• Money to be taken from Fannie Mae and Freddie Mac
  a of their new business purchases.
• Delayed implementation money would begin to
  flow in Fall, 2009 more would come in 2010,
  2011, and beyond.
• Money would go to states and in turn from states
  to developers of affordable housing.

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National Housing Trust Fund

• 75 of money will have to be spent on the lowest
  income people (at or below 30 of area median
  income).
• Key concerns
• Not enough .
• Fannie and Freddie have been taken over by new
  federal regulator we are hopeful that by Fall
  of 2009 the regulator will allow them to make
  payments into the NHTF.
• Doesnt help people losing housing now.

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Renter Protections

• Language from bailout bill
• Directs federal agencies holding troubled
  mortgages to coordinate where permissible, to
  permit bona fide tenants who are current on their
  rent to remain in their homes under the terms of
  the lease.
• Currently being tested in a Connecticut lawsuit
  were concerned that its not strong enough to
  prevent evictions.

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EFSP

• Emergency Food and Shelter Program
• McKinney Act program housed at FEMA.
• Communities get money to make emergency rent
  payments, help with moving expenses.
• Current year funding up from 135m-200m.

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Whats next for 2009?

• Our goals?
• Keep families from losing homes to foreclosure.
• Protect innocent tenants where landlords are
  foreclosed on (keep them in their homes as long
  as possible).
• Provide new housing for owners or renters who do
  lose their homes, so that they do not wind up in
  homeless shelters.

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Candidate Goals?

• McCain
• Plan to have government purchase troubled
  mortgages at full value then reduce homeowner
  exposure to fixed rate mortgage at current value
  of home.
• Pros Could really help many homeowners.
• Cons Very costly taxpayers bear the full
  burden banks and lenders who made irresponsible
  loans get all their money back.

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Candidate Goals?

• Obama
• 3 month foreclosure moratorium.
• Fix bankruptcy law so that judges can modify
  the terms on first mortgages to help people save
  their homes.
• Ensure that federal agencies do more to modify
  loans held by Fannie / Freddie and banks or other
  entities under their control.
• Pros Comprehensive.
• Cons Will the loan modifications happen?

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Our Agenda!

• Preventing foreclosures
• 3 month foreclosure moratorium.
• Bankruptcy modifications.
• Combination of candidate plans, to ensure that
  loans are modified to keep people in their homes
  without the full financial burden being turned
  over to taxpayers.
• These are big ticket items where we can engage
  but wont play a leading role.

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Our Agenda!

• Protecting tenants
• If a home is foreclosed on, any subsequent owner
  can choose to remove a tenant.
• However, we can provide incentives to subsequent
  owners to keep tenants in place, and we can
  require a 90 day notice period at minimum, before
  tenants can be evicted.
• 200m fund to help tenants move flexible and
  cost effective homelessness prevention.
• Opportunity for you to engage.

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Our Agenda!

• Providing new housing
• Use Neighborhood stabilization and NHTF.
• Create a pool of new HUD Section 8 housing
  vouchers, targeted to families who are homeless
  under the broader definition used by ED (as
  opposed to narrow HUD definition).
• Allow schools and other providers serving
  children to qualify families for assistance, in
  coordination with housing authorities.
• Another opportunity to engage.