WASHINGTON, DC – Today, Congressman Bill Delahunt joined with his colleagues in the House of Representatives to pass a comprehensive housing package designed to stabilize home values and assist thousands of homeowners on the South Shore, Cape Cod and the Islands who find themselves in danger of losing their homes.

“In the next twelve months over 30,000 Massachusetts homes will be at risk of going into foreclosure, and 2,000 of them will be in southeastern Massachusetts,” Delahunt said.  “This legislation will provide additional financing options for struggling homeowners while also helping our region’s homebuilding industry get back on track.”

H.R. 3221, The American Housing Rescue and Foreclosure Prevention Act of 2008, and H.R. 5818 the Neighborhood Stabilization Act of 2008, were approved today by the House with bipartisan support.

According to the Warren Group 2,828 homes have gone completely through the foreclosure process in Massachusetts in just the first three months of 2008.  This represents a 138.36% increase over last year.  In Barnstable County, more than 500 foreclosure deeds have been filed since last summer.  On Cape Cod, the Housing Assistance Corporation (HAC) recently opened a Foreclosure Education and Prevention Center and is now receiving 25 new foreclosure clients each week. HAC is currently working with several hundred residents experiencing problems with their current mortgage.

Rick Presbrey, President and CEO of HAC, believes that this volume of activity we are now seeing represents only a portion of the homeowners who are at risk of foreclosure.

“Foreclosures on Cape Cod are at a crisis level and it’s only going to get worse,” Presbrey said. “Predatory lending practices, a high level of debt and skyrocketing fuel costs are all factors making it harder than ever for many homeowners to keep up with their mortgage payments. This new legislation provides important resources that will help homeowners at risk work out new repayment plans and hold onto their homes,” he said

Presbrey also sees value in the component of the legislation that will bring previously foreclosed upon homes back onto the market at affordable rates and hopes that some of these will provide young workers with an opportunity to become homebuyers and remain living and working on the Cape.

The American Housing Rescue and Foreclosure Prevention Act of 2008 incorporates provisions from several bills passed by the Senate and will provide mortgage refinancing assistance to 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 allow borrowers in danger of losing their home to refinance into lower-cost government – insured mortgages they can afford to repay.

The Neighborhood Stabilization Act of 2008 provides $15 billion in loans and grants to states to acquire vacant, foreclosed homes. The legislation allows communities to rehabilitate foreclosed properties which currently drive down surrounding home properties, and place these homes back on the market.

Specifically this legislation would also:

• Provide a zero-interest, 15-year loan for first-time homebuyers, providing them up to $7,500 for a home purchase over the next year.
• Increase the volume cap for the low-income housing tax credit temporarily to allow states to allocate more credits to developers of low-cost housing.
• Expand the Federal Housing Administration to allow it to provide up to $300 billion in new guarantees to help troubled homeowners to refinance their mortgages. Existing lenders or mortgage holders who participated would receive payment of no more than 85 percent of the property’s current appraised value. If the borrower defaulted on the loan, the government would be liable.
• Overhaul the regulation of Fannie Mae and Freddie Mac by bringing them under a single independent regulator with broad safety and soundness powers to establish a new affordable housing fund modeled on the Affordable Housing Programs of the Federal Home Loan Banks.
• Make permanent the temporary increases in conforming loan limits included in the economic stimulus law which were raised from $417,000 to either 125% of the median home price in the local market or $729,750, whichever is less.
• Make permanent the temporary increase in the FHA’s mortgage loan limit, from $362,790 to either 125% of the median home price in the local market of $729,750, whichever is less.
• Direct the Department of Housing and Urban Development to serve borrowers with slightly higher credit risk and raise fees to cover the additional risk while providing for a refund if the borrower makes five years of on-time payments.
• Extend the maximum FHA term from 35 to 40 years.
• Provide protection from investor lawsuits to mortgage services who make specified long term loan modifications.

Presbrey said that anyone who has fallen behind on their mortgage or is at risk of falling behind should call HAC’s foreclosure center as soon as possible. The sooner the homeowner begins to get help, the better the chances that they can hold onto their homes. HAC’s counseling services are available across the Cape. For more information, call (508) 771-5400 or visit www.haconcapecod.org

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