Schakowsky called on Fannie Mae to aggressively work with community organizations to deliver assistance to victims of predatory lenders as quickly as possible.  Schakowsky is a member of the Housing and Community Opportunity Subcommittee and is the author of the Save our Homes Act of 2001, legislation to put predatory lenders out of business.
 
Below is the full text of Schakowsky’s speech.

I would like to thank Fannie Mae and CEDA for inviting me to participate in today’s roundtable discussion.  The private and public sector must work in tandem to address our state’s affordable housing crisis. I also want to express my gratitude for the work of CEDA and other advocates who have worked and continue to work to ensure that the affordable housing crisis is addressed. Without your efforts, this crisis would not be getting attention today. 

Homeownership rates continue to rise throughout the country. Over two thirds of American families are homeowners. Unfortunately far too many homeowners are losing their homes to predatory lenders. Historic discrimination in the housing market adds to the problem of predatory lending. 

People who have trouble getting a mortgage from conventional lenders are likely to use the subprime market.  According to HUD statistics, subprime lenders are three times more likely to prey on people in low-income neighborhoods than in upper-income neighborhoods. Five times more likely in predominately African American neighborhoods than in white neighborhoods.  Subprime lending is twice as prevalent in high-income African American neighborhoods as it is in the low-income white communities.  Of course not all subprime loans are predatory but clearly many of them are and we need to end these practices that force people out of their homes. Subprime mortgage refinancing increased ten fold in the nineties. Well over one million families rely on the market today.  We must clean up the subprime market.  We must also act to help victims of predatory lenders keep their homes.

I am very pleased that Fannie Mae is expanding its Anti Predatory Refinance Initiative by dedicating an additional $5 million. Fannie Mae will now help victims throughout Cook County.  

I joined Fannie Mae when it launched this program back in November 2000 by dedicating 5 million dollars to start the initiative.  It is my understanding that to date this pilot program has rescued 10 families.  We need to do more.  It is my hope that Fannie Mae will aggressively work with community organizations to disperse the money in a timely fashion.  I want to work with Fannie Mae to expedite its approval process.

We need to do more than simply help homeowners that are ripped off by predatory lenders. We need to stop predatory lenders from stealing people’s homes in the first place. That is why Congress needs to pass predatory lending legislation.  We need strong federal standards that will not allow lenders to use loopholes to escape local and sate laws.  

As you all probably know, I have introduced a bill called “The Save Our Homes Act.”  My bill has twenty cosponsors.  It creates strong consumer protections and it ensures the rights of class action lawsuits.  I hope Fannie Mae will work with Congress to pass anti-Predatory lending legislation.  I also want to make a few comments on our national response to the affordable housing crisis.

As you know, thirty-nine percent of Illinois families cannot afford fair market rent for a two-bedroom apartment.   One out of five renters in Illinois spends more than 50% of their income on rent. Furthermore, 30,000 units of project-based housing will expire within 5 years. The problem will grow much worse if we do not act now.  Unfortunately, the Bush Administration has not made affordable housing a priority.

While I am pleased that the Administration’s budget request calls for renewal of existing Section 8 programs and 34,000 new vouchers, the overall housing budget is woefully inadequate. The Administration’s HUD budget does not aggressively confront our country’s affordable housing shortage.  

While we spare no expense to attack terror around the world, we must also use every resource available to provide for the critical needs of American families.  Some might argue that we do not have the resources to provide affordable housing. I disagree. The Bush budget calls for more tax breaks for the wealthiest Americans and for large corporations. This is a matter of priorities. We need to make the needs of American families a priority. This budget simply does not.

Over 16 million families have critical housing needs, yet federal support for affordable housing has declined steadily since 1978. Increased homelessness is directly attributable to the federal government’s neglect. 

We need to enact a comprehensive and productive plan now. Low- and moderate-income families regularly have to choose between paying their rent and paying for other critical needs. We must do better. As a member of the Housing Subcommittee, I will work to increase HUD’s funding for affordable housing.  Toward that end, I am an original cosponsor of “ The National Affordable Housing Act.” Congressman Sanders' (I-VT) bill would use FHA surpluses to create a trust fund to build affordable housing and address the housing shortage.  By enacting this legislation, we could more than triple affordable housing construction next year and provide housing to more than 200,000 families. The bill has over 160 cosponsors and it has been endorsed by over 1,700 organizations. 

Housing production will stimulate the economy. A $5 billion investment would result in up to 1.8 million jobs and $50 billion in wages. Instead of tax cuts for the rich, we should provide opportunity to the most vulnerable members of our society. The housing crisis doesn’t only impact families it has a devastating effect on our children. For example, average reading scores for elementary age students who moved three or more times were half of those of students who did not move. Without question stable housing is the cornerstone to having future opportunity. It is well worth the investment.  

I enjoy working with this dedicated group of community leaders and I am looking forward to our future collaboration.