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March 6, 2009

U.S. House Passes Legislation to Stem Tide of Foreclosures

Velázquez says thousands of New York homes will be saved

Washington, DC –The U.S. House of Representatives approved the “Helping Families Save Their Homes Act” last night to provide immediate assistance to families at risk of losing their homes. With a new report indicating 209,500 homeowners in New York are behind on mortgage payments or in foreclosure, Congresswoman Nydia M. Velázquez (D-NY) applauded the bill for taking a much-needed step toward stabilizing the housing market.

“We have to keep hard-working families in their homes and stop the steep decline in home prices.  Our housing market is central to restoring the American economy, and we all stand to lose if we don’t act now,” said Velázquez.

A senior member of the House Financial Services Committee, Velázquez has been one of the most outspoken advocates for allowing bankruptcy judges to modify home loans.  The bill approved yesterday makes that happen.  Because bankruptcy is such a difficult process, it is not expected that the number of filings will increase greatly.  Instead, banks will be more willing to work with homeowners before the issue reaches court.  This common-sense, practical approach does not cost taxpayers a dime and is expected to reduce foreclosures by 20 percent. 

“Right now, it’s easier for loan servicers to foreclose on a property than to work with the homeowners.  With this law, we put an end to the unfair disadvantage that struggling families face today and help keep them in their homes,” Velázquez said.

In addition to the bankruptcy provisions, the “Helping Families Save Their Homes Act” reduces fees under the Hope for Homeowners program and offers new incentives for lenders to help homeowners overwhelmed by their mortgage payments.  With the number of New York City foreclosures in January soaring 64 percent over the previous month, these policies are needed to help stem the rising tide of foreclosures. 

“When houses are foreclosed upon, not only do homeowners suffer, but property values in the area decline, neighborhood businesses are hurt and jobs are lost.  This legislation will help keep our neighborhoods from sinking under the weight of foreclosed properties,” Velázquez said.

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