South Bend, IN -Today, Congressman Joe Donnelly visited a property in South Bend that is currently in foreclosure to discuss The Neighborhood Preservation Act. Donnelly introduced the legislation, which passed the House of Representatives this past July, along with Congressman Gary Miller (R-Calif.). It would allow banks to rent a foreclosed home to its distressed owner as an alternative to eviction.
“The house in foreclosure that I visited today is a good example of how important it is to keep folks in their homes whenever possible. Not only does it help out the distressed homeowner, but it also minimizes the negative impacts that an abandoned home can have on its surrounding neighborhood,” Donnelly said. “During these challenging economic times, we must do everything possible to give struggling homeowners a second chance to get back on their feet. This legislation is a step in the right direction.”
H.R. 2529, The Neighborhood Preservation Act, would allow a bank to rent a foreclosed property for up to five years with the lease beginning within two years of the legislation being signed into law. The previous owner could also have the opportunity to buy back his home pending the bank’s approval. Further, this legislation would enable the lender to wait to resell the property until the market is more stable, and thereby potentially recover all or part of the loss that would otherwise have been incurred due to immediate sale in the currently saturated market.
Leasing foreclosed properties would not only help provide some relief to foreclosed homeowners, but also to entire communities that are affected by ongoing instability in the housing market. Foreclosed properties that are left unoccupied often bring down the values of neighboring homes.
Congressman Donnelly was joined by Judy Fox, associate clinical professor of law at Notre Dame who helps run the Legal Aid Clinic at Notre Dame, and South Bend Mayor Steve Luecke.
“The biggest impact of this whole foreclosure crisis has been on communities and neighborhoods,” said Fox. “Coming up with creative solutions to allow people to stay in their homes instead of the homes being abandoned—even if it is just a temporary fix—is better for everyone involved. Congressman Donnelly’s bill would provide so many of my clients with a great alternative to abandoning their homes.”
“I appreciate Congressman Donnelly’s hard work in pushing for The Neighborhood Preservation Act. Helping people stay in their homes is one of the most important things that we can do as we face this current housing crisis and as we continue to build better cities,” said Luecke. “In South Bend, we are using proactive initiatives to help avoid foreclosure and abandoned housing through partnerships with local community development corporations and neighborhood groups.”
The legislation is now pending before the Senate.
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