U.S. HOUSE OF
REPRESENTATIVES
COMMITTEE ON FINANCIAL SERVICES
Rep. Barney Frank (D-MA)
Ranking Democratic Member
For Immediate Release:
Contact:
Jennifer Porter Gore, 202-225-7141
Kay Gibbs, 202-225-7054
June 09, 2003
Barney Frank And Democratic Financial Services
Members Reject Rhetoric Of Homeownership Month
WASHINGTON--Rep. Barney Frank (D-MA) today led a group of
Democrats from the House Financial Services Committee, on which
he serves as Ranking Member, in criticizing the Bush
Administration’s launch of National Homeownership Month. The
House Financial Services Committee has jurisdiction over all of
the nation’s housing programs.
“The Bush American Dream proposal is likely to remain just
that—a dream—because after eight straight years of dramatic
gains in minority homeownership the Bush Administration has the
distinction of presiding over a widening homeownership gap
between both African Americans and Hispanics and white
homeowners, a soaring mortgage delinquency and foreclosure rate,
and a rising rate of homelessness,” said Rep. Frank.
The Democratic members noted that the key Bush Administration’s
initiatives have not produced a single new homebuyer. The
president’s signature down payment assistance program has not
yet begun and provisions allowing low-income Americans to use
Section 8 vouchers for down payments have been stalled at HUD.
Also, despite enactment of more than $1.8 trillion-worth of tax
cuts, the Administration failed to move on its Single Family Tax
Credit proposal. These activities have occurred in an economic
climate that has reduced housing opportunities for low- to
moderate-income people overall. While homeownership is
recognized as a sign of upward mobility, this administration has
pursued policies that impede economic advancement that can lead
to increased homeownership.
“The hypocrisy of the Bush Administration is just staggering,”
added Rep. Maxine Waters (D-CA), Ranking Member of the Housing
and Community Opportunity Sub-Committee. “Feel Good” rhetoric
about the importance of homeownership is being used as a
smokescreen to hide the fact this Administration is starving
federal housing programs.”
The members also pointed to the fact that last year’s bipartisan
bill that would have authorized down payment assistance was
killed at the initiation of the Administration and to its
efforts to slash funding for various housing programs that
assist low- and moderate-income renters such as the HOPE VI
public housing revitalization program and the Section 8 housing
voucher program. Although the Administration’s efforts to end
the successful HOPE VI program may be thwarted, Republicans
still blocked Democrats’ attempt to include language providing
homeownership counseling and foreclosure prevention assistance
in legislation approved in May.
“Obviously, helping people keep their home enhances
homeownership rates, something both the current Administration
and all members of Congress want to do,” noted Rep. Barbara Lee
(D-CA), who introduced the amendment that would allow HUD block
grant funds to be used for foreclosure prevention. “I hope that
increasing our homeownership rates will include a full range of
initiatives instead of throwing money at part of a complex
problem.”
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The Committee oversees all components of the
nation’s housing and financial services sectors including
banking, insurance, real estate, public and assisted housing,
and securities. The Committee continually reviews the laws and
programs relating to the U.S. Department of Housing and Urban
Development, the Federal Reserve Bank, the Federal Deposit
Insurance Corporation, Fannie Mae and Freddie Mac, and
international development and finance agencies such as the World
Bank and the International Monetary Fund. The Committee also
ensures enforcement of housing and consumer protection laws such
as the U.S. Housing Act, the Truth In Lending Act, the Housing
and Community Development Act, the Fair Credit Reporting Act,
the Real Estate Settlement Procedures Act, the Community
Reinvestment Act, and financial privacy laws.
The
Bush
Administration on Homeownership:
The Real Deal
The Bush Administration’s
homeownership record is little more than rhetoric, press
releases, and political events, while its key initiatives have
not produced a single homebuyer in 2˝ years. Under its watch,
the minority homeownership gap has widened, delinquency and
foreclosure rates have soared, and predatory lending practices
have proliferated.
So-Called Key Administration
Initiatives Have Produced NO NEW
HOMEBUYERS
· Using
Section 8 vouchers for down payments.
In 2000 President Clinton signed a bill allowing low-income to
use vouchers for down payment. Yet, 2˝ years later the Bush
Administration still has not implemented this initiative,
although HUD claims the program is up and running.
·
Down
payment Assistance Initiative.
First proposed in early 2001, the Administration waited more
than a year (15 months) to submit authorizing legislation. It
still has not issued regulations to distribute the $75 million
Congress approved in Feb. 2003. The Administration lost $50
million appropriated by Congress in 2002 by failing to spend
the money.
·
Single
Family Tax Credit.
The
Administration made no effort to include this in the $1.8
trillion of tax cuts passed in 2001 or the recently approved
$350 billion tax cut.
The Minority Homeownership Gap
Has Widened
·
Since the
President Bush took office the homeownership gap between
whites and African-Americans increased by 5%
(from 26.1% to 27.3%)
and by 7%between whites and Hispanics (from 26.4% to 28.3%).
[Source: U.S. Census Bureau. Data compares 4th
quarter, 2000 and 1st quarter 2003]
·
The
homeownership rate for African-Americans and Hispanics has
trended downward since the Administration took office. The
African-American homeownership rate has fallen
from
47.8% to 47.7%. The Hispanic homeownership rate has fallen
from 47.5% to 46.7%.
[Source:
U.S. Census Bureau Data compares 4th quarter, 2000
and 1st quarter 2003]
Mortgage Delinquency and
Foreclosure Rates Have Soared
·
The
percentage of all loans in foreclosure rose 39% since the
Administration took office (from 0.85% to 1.18%).
[Source:
MBAA Data compares 4th quarter, 2000 and 4th
quarter 2002]
·
The percentage of
loans 90 days delinquent rose 26% since the Administration
took office [from .62% to .78%].
[Source: MBAA Data
compares 4th quarter, 2000 and 4th
quarter 2002]
Singular Focus on
Homeownership Masks Cuts that Threaten Tens of Thousands of
Families
-
The
Administration's rhetorical emphasis on minority
homeownership is a smokescreen to obscure deep funding cuts
it has made to affordable rental housing programs, which
hurt the over 50% of minority households that rent their
home. The Administration eliminated a $300 million a year
program to combat crime in public housing, proposes to
eliminate a $574 million a year program to revitalize public
housing, and recently refused to fully fund public housing
operating expenses. Its Section 8 block grant proposal would
raise rents and jeopardize rental assistance for tens of
thousands of minority families. And, last year, the
Administration intervened to block an affordable housing
construction initiative, which would have funded both
affordable rental housing and homeownership.
The Democrats’
Track Record on Homeownership
Democrats continue to
pursue an agenda that expands homeownership opportunities,
combats predatory lending, fights discrimination, places a
priority on keeping homeownership in their homes, and protects
communities negatively impacted by high foreclosure rates.
Some examples are:
Homeownership
Opportunities
•
Rising
Minority Homeownership Rates.
During
the 8 years of the prior Democratic administration, minority
homeownership rates rose steadily. Between 1992 and 2000, the
African-American homeownership rate rose 12% (from
42.6% to 47.8%); the Hispanic homeownership rate rose 19%
(from 39.9% to 47.5%).
[Source:
U.S. Census Bureau]
• Teachers,
Police, and Firefighters.
Democrats recently passed through committee an initiative
[Capuano amendment] to provide block grant funds for down
payment assistance for moderate-income teachers, police, and
firefighters. Democrats have twice passed through the
House a provision authorizing 1% down FHA loans for teachers,
police, and firefighters; this provision was blocked by Senate
Republicans.
• Manufactured
Housing.
In 2000, Democrats enacted initiatives to protect low-income
homebuyers of manufactured housing from problems with shoddy
construction – through establishment of a national
installation standard and a dispute resolution process to
identify responsibility for problems with manufactured homes.
The same bill also included a Democratic initiative to
lengthen FHA loan terms for manufactured home lots.
•
Homeownership - Public Housing and Section 8 families.
Democrats passed through committee a requirement [Waters
amendment to H.R. 1276] that grantees using these block
grants for homeownership conduct outreach to public housing
and Section 8 families.
Predatory Lending
• Predatory
Loan Bill.
Democrats
introduced legislation last year [LaFalce/Sarbanes] to
address the problem of high cost predatory mortgage lenders,
to protect seniors, low-income, and minority homebuyers.
The bill was blocked by Congressional Republicans.
• Suitability
and Housing Counseling.
The
Democrats passed through committee a provision [Velazquez
amendment to H.R. 1276] to require localities using these
block grant funds for homeownership to ensure suitability of
families to undertake and maintain homeownership. A
Democratic initiative [Scott bill] to increase
counseling to combat predatory loans has also been filed.
Foreclosure Prevention
•
Democrats
offered an amendment [Lee amendment to HR 1276] to let
these HUD block grants be used for foreclosure prevention
counseling and assistance [blocked by Republicans].
•
Democrats
have introduced legislation [Fattah bill] to strengthen
foreclosure prevention efforts in the FHA single-family loan
program.
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