Support the Housing and Economic Recovery Act of 2008
Recipient: U.S. Senate
On behalf of the Leadership Conference on Civil Rights (LCCR), the nation’s oldest, largest, and most diverse civil and human rights coalition, we write to express our support for H.R. 3221, the “Housing and Economic Recovery Act of 2008.” H.R. 3221 takes a number of crucial steps in the right direction to address a housing and financial crisis that is of profound concern to the communities that we represent. We are very grateful for the tireless efforts of the leadership of the Senate Banking and House Financial Services Committees in developing and moving this sweeping bipartisan legislative package.
Several aspects of H.R. 3221 are especially important to the communities we represent:
- Nearly $4 billion in Community Development Block Grants for communities to purchase and rehabilitate foreclosed properties in hard-hit areas, and return affordable housing to those who need it most, while reducing urban blight, safety hazards, and drains on limited local resources in the process.
- The creation of an Affordable Housing Trust Fund, funded by Fannie Mae and Freddie Mac, to provide affordable rental housing for people who need it the most.
- A new nationwide licensing and registration system for loan originators that will greatly improve the oversight of a brokerage system that, in many cases, has been a major contributor to the scourge of predatory lending tactics.
- Expanded authority for the Federal Housing Administration to help borrowers refinance into more affordable loans. While we have concerns about the equitysharing requirements of this system, it could nevertheless prevent hundreds of thousands of families from losing their homes.
- Bold steps to restore public confidence in the financial soundness of Fannie Mae and Freddie Mac, as well as improved oversight of their operations. The importance of the GSEs in restoring liquidity to the troubled housing finance market cannot be overstated.
We recognize, as the case would be in any omnibus legislation on such a complex issue, that many difficult compromises and decisions were made in the name of moving forward. On the whole, however, we believe that H.R. 3221 will do far more good than harm.
Our primary concern with H.R. 3221, we must note, stems from what it does not include: reforms that would level the playing field between borrowers and loan servicers. While we would certainly like to see troubled mortgages be modified through voluntary industry-led efforts such as the “Hope Now Alliance,” it is becoming painfully clear that those efforts are not resulting in enough sustainable loan modifications. This is partly because of the modern complexity of loan products and securitization practices, but also partly because servicers currently hold all of the cards when dealing with struggling homeowners.
Since early last year, while lending industry advocates continued to deny or downplay the widespread problems in the housing finance sector, our member organizations have urged Congress to give homeowners themselves more options to prevent foreclosures – particularly through reforms in the servicing industry to promote more modifications, restoring Chapter 13 bankruptcy relief as a last resort for homeowners, and targeted foreclosure deferment policies. Such mandatory foreclosure prevention policies remain absolutely vital to resolving our nation’s foreclosure crisis, and we will continue working with you to enact them. It will also be important to assist families and communities that have already been devastated by widespread foreclosures.
Again, we urge you to support H.R. 3221, and we believe that the White House would be wise to quickly sign it into law. Thank you for your consideration. If you have any questions, please feel free to contact Rob Randhava, LCCR Counsel, at 202-466-6058.
Dr. Dorothy I. Height, Chairperson
Wade Henderson, President & CEO
American Association of University Women
American Federation of Labor – Congress of Industrial Organizations
American Federation of Teachers
A. Philip Randolph Institute
Center for American Progress Action Fund
Center for Responsible Lending
Japanese American Citizens League
NAACP Legal Defense and Educational Fund, Inc.
National Congress of American Indians
National Council of La Raza
National Council of Negro Women
National Fair Housing Alliance
National Low Income Housing Coalition
Organization of Chinese Americans