WASHINGTON, D.C. – December 11, 2009 – (RealEstateRama) — Congressman Chaka Fattah (D-PA)’s $3 billion Homeowners Emergency Mortgage Assistance – already a proven success at blocking foreclosures for unemployed Pennsylvanians – was approved today by the House of Representatives.
The HEMA plan is a major provision in the Wall Street Reform and Consumer Protection Act (H.R. 4173), a broad overhaul of financial markets, which passed, 223 to 202. Fattah voted for the bill.
The national HEMA plan draws on unused funds in the Troubled Asset Relief Program (TARP) to provide a $3 billion pool for home-saving emergency mortgage loans for unemployed and financially distressed homeowners with prime mortgages. It is modeled after the successful Pennsylvania program which Fattah, as a 26-year-old state representative, took the lead in designing and guiding into law in 1983.
That program has provided almost 43,000 home-saving loans for jobless, foreclosure-threatened Pennsylvanians over the past quarter century.
Fattah today noted the uneven record of other foreclosure mitigation efforts during the recent mortgage crisis and cited the Pennsylvania success story as “tried and true, a successful program, not an untried idea.”
“We have tried everything else,” Fattah declared to the House. “It’s time to get people’s mortgages paid directly and slow the pace of home losses that are destroying families and crippling our overall economy.
“It’s time to think outside the box about foreclosures – and way past time to keep Americans inside their homes.”
The Wall Street Reform and Consumer Protection Act – with wide ranging financial reforms, oversight and consumer protection in addition to HEMA – now moves to the Senate. It enjoys support from the Obama Administration.
The road to enactment for a national HEMA program began with legislation Fattah introduced in 2003. In the 111th Congress, Fattah’s proposal was incorporated into H.R. 3766, known as the Main Street TARP Act, introduced by Chairman Barney Frank (D-Mass) of the Financial Services Committee, with Subcommittee Chairwoman Maxine Waters (D-CA) and Fattah as original cosponsors. That proposal is now incorporated into the Wall Street Reform bill.
Fattah, in his remarks thanked Frank and Waters for their leadership and support in embracing HEMA. Waters, in turn, during debate on the bill, returned the favor.
“We know that these kinds of loans can work. Since 1983, Pennsylvania has run a very successful loan program–just ask Mr. Chaka Fattah–that has saved 42,700 unemployed homeowners from foreclosure,” she said, pointing to Fattah seated behind her in the House chambers.
The Fattah HEMA plan has drawn enthusiastic support from stakeholders.
The United States Conference of Mayors wrote all members of the House supporting the Wall Street Reform Act, and specifically endorsed Fattah’s proposal as vital to the interests of cities.
“We also support the authorization of $3 billion in unspent TARP funds towards foreclosure mitigation,” declared Tom Cochran, President and CEO of the Conference of Mayors. “The citizens of our cities continue to face losing their homes. Additional resources for foreclosure mitigation will strengthen the nation’s economy and our neighborhoods.”
Brian Hudson, executive director and CEO of the Pennsylvania Housing Finance Agency, which oversees the program in the state, said: “HEMAP is at heart an unemployment program. With unemployment at 10 percent but showing signs of improvement, Pennsylvania provides an excellent model for the nation by allowing homeowners to stay in their homes while jobs are being generated.
“I join other Pennsylvanians in thanking Congressman Fattah for his leadership in pushing the Pennsylvania model and for his long history of advocacy for emergency mortgage relief and affordable housing,” Hudson said.
John Dodds, executive director of the Philadelphia Unemployment Project and a forceful advocate for Pennsylvania’s emergency mortgage relief program for the past quarter century, credited Fattah with plugging a hole in the mortgage foreclosure crisis.
“The majority of people going through foreclosure have prime – not subprime – mortgages, but have lost their jobs,” Dodds said. “They need emergency help to stay in their homes. Congressman Fattah and I worked long and hard to deal with this problem in Pennsylvania. His program takes our success story and applies it on a national scale during today’s economic hard times. We can thank him for this creative approach bringing federal resources from TARP to this critical need for emergency mortgage assistance.”
Under Fattah’s HEMA proposal, a lender must inform a homeowner in mortgage default about the HEMA program before the lender can begin foreclosure proceedings.
A homeowner found eligible to participate in the program then makes a partial mortgage payment to the U.S. Department of Housing and Urban Development instead of the lender. HUD subsequently pays the homeowner’s entire monthly mortgage to the lender provided that the homeowner has a reasonable prospect of resuming mortgage payments within 24 months.
Fattah, in speeches advocating for the emergency foreclosure relief, noted: “There’s broad agreement that a major threat to homeowners today is loss of their homes because of unemployment and job distress through no fault of their own. Our program is a game changer, especially for struggling homeowners in our cities and rural areas and for minorities. Now we are on the verge of success,” he said.
For More Information:
The Wall Street Reform and Consumer Protection Act is H.R. 4173
Fattah’s Homeowners Emergency Mortgage Assistance Act is H.R. 3142
