NLC Supports Efforts to Strengthen Housing Finance System
Duvall, Cherie, Nation's Cities Weekly
Facing the growing number of home foreclosures across the U.S., NLC has renewed housing finance system reform as a top legislative priority for the 2nd Session of the 110th Congress.
NLC is urging Congress to swiftly approve legislation that would protect homebuyers from predatory lending practices, help struggling homeowners avoid foreclosure and provide cities with the tools and resources necessary to mitigate the economic consequences of the foreclosure crisis.
In addition to the after-effects of foreclosure on families, NLC is educating federal lawmakers about the unexpected consequences the current mortgage crisis is having on local governments. Foreclosed houses, which often sit vacant for long stretches of time, are contributing to the blight long-associated with abandoned properties. Local governments must bear at least the short-term costs of maintaining these vacant properties until they can track down the owner. This can be difficult since mortgages are resold among lenders and investors.
Additionally, since vacant properties all too often become havens for crime, local governments are bearing increased costs for greater police presence in those areas where foreclosed vacant properties are concentrated. At the same time, cities are forecasting that there will be decreased property tax revenues due to declining assessed valuations.
These and other economic and social costs associated with foreclosure threaten to undo decades of public and private investment in community and economic development activities in cities and towns across the country.
Messages to Congress
As part of its lobbying efforts, NLC is taking the following messages to Congress:
* Homeownership is the foundation for stable communities and a strong economy. For every 1,000 single-family homes under construction, 2,100 full-time jobs are created. In 2005, the housing sector accounted for 16 percent of national economic activity. Conversely, in 2006, the drop in homebuilding shaved more than a full percentage point off national economic growth.
* Unsound and predatory lending continues to threaten family self-sufficiency. These practices place financial burdens on families that are impossible to overcome, and strip -them of equity that has been built over the years. Predatory mortgage lending costs Americans more than $9.1 billion each year; the social costs are likely higher.
* Foreclosures are rising and neighborhoods are in distress. In the first six months of 2007, foreclosures increased more than 55 percent over the same period in 2006, reflecting one home foreclosure for every 134 U. …