Housing

The housing crisis has had a significant impact in Illinois. One in 38 homeowners is projected to lose their homes to foreclosure over the next two years. Homeowners who do not lose their homes have also been hurt by the crisis. The Pew Charitable Trust estimates that 60% of all Illinois homeowners will feel the ripple effects of the housing crisis. The crisis could also cost state and local tax bases over $27 billion in lost revenue.

In response, Congress has taken strong action by passing key legislation – the Housing and Economic Recovery Act of 2008 – that will help improve home values and assist Americans that are in danger of foreclosure. I voted for this legislation, which was signed into law on July 30, 2008.

This legislation provides mortgage refinancing assistance, which will help keep families from losing their homes and protect neighboring home values. The plan also expands programs run by the Federal Housing Administration (FHA) that will allow borrowers in danger of losing their home to refinance into lower-cost government-insured mortgages they can afford to repay.

This plan is not a bailout – it requires both homeowners and lenders to take responsibility. In order to qualify for refinancing and new government backed mortgages, lenders and mortgage investors will be required to take a loss by reducing the principal owed to the current assessed value and borrowers must share any profit from the resale of a refinanced home with the government. Additionally, the new plan is open only to owner-occupied homes. Speculators, investors and vacation/second-home owners are not eligible.

I also supported the Neighborhood Stabilization Act of 2008, which provides $15 billion in loans and grants to states to acquire vacant, foreclosed homes. The legislation will allow local communities to rehabilitate foreclosed properties, which currently drive down surrounding home values, and place these homes back on the market. This bill passed the House in May of 2008.

If you are behind in your home payments or in danger of home foreclosure, please contact the Housing Counseling Services, Inc. or visit HUD's counseling site