BOSTON – Senator John Kerry announced that the Housing and Economic Recovery Act passed the Senate by a vote of 63-5 earlier today. The bill contains four key provisions, introduced by Kerry, which will help thousands of Massachusetts homeowners survive the nation’s rapidly declining housing market.



“Foreclosures are devastating families here in Massachusetts each and every day, and this housing package will throw them a lifeline. It will help to reduce the number of foreclosures, increase access to safe and fair mortgage credit for all homebuyers and help create much-needed jobs. It’s a good first step and I strongly urge my colleagues in the House and the President to support these important safeguards that will help millions of hard-working Americans get back on their feet,” said Senator Kerry.



Four key provisions included in the Housing and Economic Recovery Act introduced by Senator Kerry:



* Kerry worked with Senator Gordon Smith (R-Oregon) to include the Mortgage Revenue Bond Provision, which provides an additional $11 billion of tax-exempt private activity bonds to housing finance agencies. The provision would allow the proceeds from the bonds to be used to refinance subprime loans, provide mortgages for first time homebuyers and for multifamily rental housing. This means that approximately $209 million in targeted mortgage relief will be available to the homeowners of Massachusetts, which could result in as may as 1,000 new loans in Massachusetts. Nationwide this would result in close to 87,000 additional loans.



* The bill also contains provisions to amend the Service Members Civil Relief Act (SCRA) by extending the period a lender must wait before starting disclosure procedures from 90 days to nine months after a service member has returned from active duty and capping interest on mortgages at 6 percent for one year after a serviceperson completes his/her services.



* The bill also establishes a National Affordable Housing Trust Fund, introduced by Kerry and Senator Olympia Snowe (R-Maine) which requires Fannie Mae and Freddie Mac to set aside a portion of their profits of which, 65 percent will be used for the Housing Trust Fund (approximately $3.4 billion over ten years), and 35 percent will go toward a Capital Magnet Fund to leverage affordable housing development and community development activities. In 2000, Kerry wrote the first National Affordable Housing Trust Fund legislation to construct, rehabilitate, and preserve 1.5 million units of housing over the next 10 years.



* The bill includes $3.92 billion for the Community Development Block Grant (CDBG) program which will help local communities fight the effects of foreclosure. Earlier this year, Kerry, along with Senator Edward Kennedy, sent a letter to the Senate leadership underscoring the need for $2 billion in additional funding for CDBG in the upcoming housing legislation.



The bill now heads to the House of Representatives for its approval.



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