Monday, September 22, 2008

NPACH Statement: Bailout Must Help Low Income Families, Not Just Wall Street

The U.S. economy is in turmoil. Earlier this year, Bear Stearns received a massive federal government subsidy, in order to facilitate a fire sale. In recent weeks, the government has taken over Fannie Mae and Freddie Mac, and seized control of AIG. Foreclosures continue to rise, and the stock market is volatile. Now, federal officials and congressional leadership are discussing a Wall Street bailout that could cost U.S. taxpayers up to $700 billion.

In these troubled times, as Congress acts to protect the safety and soundness our of financial system, we must not forget that the cause of our current problems is the mortgage and foreclosure crisis. While the impact may be felt across many sectors of the economy, what we have is at its heart a housing problem - one which demands housing-related solutions.

HUD recently declared that homelessness was down, a statement reported breathlessly by far too many in the media. Despite this government spin, cities across the country have been reporting a huge influx in homelessness due to foreclosures and a declining economy. Last week, a HUD spokesman acknowledged that their numbers predated the foreclosure crisis, and that the agency has no idea of how rising foreclosures are actually affecting homelessness, terming it "a great question," and stating that "we're still trying to get to that."

We understand the vulnerable position so many families are in - a recent report tells us that over 2 million children will be negatively affected by the foreclosure crisis, with many of them becoming homeless. And we believe that if the government chooses to intervene financially to protect corporate America, we must also protect families who are at risk of homelessness or already homeless. These families should not have to live doubled up, in tent cities, and on the streets while failed Wall Street CEOs retreat to their multi-million dollar mansions.

The President has called on Congress to swiftly enact a bailout plan. We agree that action to assist low income and homeless families cannot wait. To ensure that any legislation helps all Americans in need, the following key affordable housing priorities must be part of any final package.

Congress must act now to:
  • Permit bankruptcy judges to modify mortgages on primary residences during the foreclosure process, to help keep families in their homes.
  • Enact baseline renter protections, to ensure that innocent tenants who pay their rent and comply with their leases are not evicted (sometimes with as little as 3 days notice) when their landlord goes through a foreclosure and the rental unit is turned over to the bank.
  • Provide an immediate infusion of at least $300 million to FEMA's Emergency Food and Shelter Program, which helps prevent and end homelessness.
  • Appropriate funds for 100,000 new Section 8 vouchers targeting homeless families.
  • Require Fannie Mae, Freddie Mac, and the new entity that will purchase mortgage securities to increase contributions to the new National Housing Trust Fund and Capital Market Fund, created earlier this year, so that more new units of affordable housing can be developed.

For additional information, contact Jeremy Rosen, NPACH Executive Director, at (202) 714-5378, or

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