Washington, DC – 08 May 2008 – Congressman Steve Cohen (TN-09) today responded to the housing crisis that has been one of the root causes of the current recession and backed key legislation that will help improve home values and assist Americans who are struggling with the housing and credit crises. The American Housing Rescue and Foreclosure Prevention Act of 2008, and the Neighborhood Stabilization Act of 2008 were both approved today by the House with bipartisan support.
“Owning a home is the American Dream, but thousands of Tennesseans are on the brink of losing their homes and becoming the next victims of the housing crisis,” said Congressman Cohen. “We had a telephone town hall last night with more than 6,000 people from the 9th District participating, and this issue is definitely weighing heavy on the minds of the people in our community. I am proud that we have backed a plan that will help end this crisis.”
The housing crisis has had a significant impact in Tennessee. One in 36 homeowners is projected to lose their homes to foreclosure over the next two years. Homeowners who do not lose their homes have also been hurt by the crisis. The Pew Charitable Trusts estimates that a quarter of all Tennessee homeowners will feel the ripple effects of the housing crisis. The crisis could also cost the state and local tax bases as much as $1 billion.
Metro Memphis’ foreclosure rate hit 2.1 percent in 2007, and the area landed at No. 13 among America’s metropolitan areas, up from 14th in 2006. The area had 22,654 foreclosure filings on 11,291 properties — an increase of 30.3 percent over 2006. This is nearly one percent above the national average of 1.033 percent of households filing for foreclosure. With the rising number of foreclosed properties in individual neighborhoods, the number of vacant homes is on the rise as well, which is leading to the occupied homes losing their value as well, creating a downward spiral.
The American Housing Rescue and 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 Federal Housing Administration (FHA) that will allow borrowers in danger of losing their home to refinance into lower-cost government -insured mortgages they can afford to repay.
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 properties, and place these homes back on the market.
“The housing crisis is impacting all of us,” added Congressman Cohen. “Families who lose their homes are directly impacted, but their former neighbors have also seen their homes lose value. Our comprehensive approach will help end this crisis and get our economy back on track.”