News From…
Congressman Dennis Cardoza
18th Congressional District of California
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| FOR IMMEDIATE RELEASE May 8, 2008 |
CONTACT: Jamie McInerney (202) 225-6131 |
| WASHINGTON – Today, Congressman Dennis Cardoza and the House of Representatives responded to the housing crisis by passing two bills that will help improve home values and assist Americans who are struggling and in danger of losing their homes. The American Housing Rescue & Foreclosure Prevention Act of 2008 (HR 3221), which included the Cardoza Amendment language increasing the Federal Housing Administration (FHA) loan limit, and the Neighborhood Stabilization Act of 2008 (HR 5818) were approved today by the House with bipartisan support.
“Sadly, I represent communities that have been dubbed ‘foreclosure capitol USA’ by the national media because San Joaquin, Stanislaus, and Merced counties all consistently rank in the top five in foreclosures nationally,” said Cardoza. “Owning a home is a big part of the American Dream. I am proud that we have backed a plan that will help homeowners who are struggling and help end this crisis.”
The national housing crisis has had a particularly significant impact in California. One in twenty homeowners is projected to lose their homes to foreclosure over the next two years. Homeowners who do not lose their home have also been hurt by the crisis. The Pew Charitable Trusts estimates that 64% of all California homeowners will feel the ripple effects of the housing crisis. The projections suggest that these effects could be even worse in the Valley.
The American Housing Rescue & Foreclosure Prevention Act of 2008 will provide mortgage refinancing assistance, which will help keep families from losing their homes and protect neighboring home values. The plan also expands programs run by the FHA that will allow borrowers in danger of losing their home to refinance into lower-cost government-insured mortgages they can afford to repay. This requires both homeowners and lenders to take on responsibility. In order to qualify for refinancing and new government backed mortgages, lenders and mortgage investors will be required to take a loss and borrowers must share any profit from the resale of a refinanced home with the government. Additionally, the program is open only to owner-occupied homes. Speculators, investors and vacation/second-home owners are not eligible.
This bill also contains the Cardoza/Frank/Miller Amendment to increase FHA loan limits, which originally passed the House in September 2007. The Cardoza/Frank/Miller amendment makes FHA loan insurance available in moderately priced home markets. The current loan limits exclude FHA from serving a large segment of moderately priced homes in higher cost areas such as California, New York, Connecticut, and Massachusetts.
“This bill, with our amendment language included, puts FHA back in business in California. It allows FHA to provide relief to distressed borrowers across the country, including here in the Valley,” said Cardoza.
The House also passed the Neighborhood Stabilization Act of 2008, which provides $15 billion in loans and grants to states to acquire vacant, foreclosed homes. The legislation will allow local communities to rehabilitate foreclosed properties, which currently drive down surrounding home values, and place these homes back on the market. This bill will have an additional public health benefit in the Valley where swimming pools on foreclosed properties become breeding grounds for mosquitoes that spread disease.
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