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May 13, 2008

Congresswoman Velázquez Brings More Legal Help to Homeowners Affected by the Mortgage Foreclosure Crisis

-Provision included in housing relief package approved by U.S. House -

Washington, DC – The U.S. House of Representatives last week approved legislation to help families keep their homes, avoid unnecessary foreclosures in the future and stabilize the housing market. The bill includes an initiative by Congresswoman Nydia M. Velázquez (D-N.Y.), New York City’s senior Member on the Subcommittee on Housing and Community Opportunity, to direct resources to legal counseling services for distressed homeowners and tenants in foreclosed properties.

“Many homeowners didn’t get sound advice at the time of purchase and today they still aren’t receiving adequate services. Our neighbors need someone on their side, because we all know the bank will be well-represented,” Congresswoman Velázquez said. “By providing a helping hand to homeowners in the hardest hit areas, we can start saving our communities one home at a time.”

Congresswoman Velázquez worked with her colleagues on the Financial Services Committee to sponsor the legal services measure. It was based on her bill introduced earlier this year, H.R. 5855, the Foreclosure Counseling Assistance Act of 2008, which provides funding to increase legal counseling services for homeowners both before and during delinquency and the foreclosure process. The measure was incorporated in the housing bill in the form of a $35 million grant program targeting the nation’s hardest hit areas and low-income homeowners. With this funding, legal service providers will have the expanded capacity to reach more homeowners and tenants to provide them with sound legal advice.

“There are many homeowners in New York City who are struggling to stay afloat. By empowering them with the knowledge to avoid foreclosure, we are taking a crucial first step toward saving their investments,” Congresswoman Velázquez said. “The House has now taken action to pass the most comprehensive response yet to the American mortgage crisis. It’s clear to all that stabilizing the housing market will be key to our nation’s economic recovery.”

The package of housing bills approved last week expand the Federal Housing Administration’s (FHA) program to allow refinancing for borrowers in danger of losing their homes, and provides states with funding to rehabilitate foreclosed homes and restore values in neighborhoods hit hard by the crisis. It also includes tax provisions to expand the ability of states to refinance subprime loans, and spur home buying by providing first-time homeowners with tax benefits. Finally, the measure includes reforms to encourage the creation of low-income housing.