Washington, DC – Today, the House Financial Services Committee passed H.R. 5830, the FHA Housing Stabilization and Homeownership Retention Act, which would create a federal program to provide refinancing assistance to allow families to stay in their homes and help stabilize the housing market.  Congressman Al Green (TX-09), a member of the Financial Services Committee, worked with fellow committee members, Reps. Mel Watt and Nydia Velazquez, to include important language that will increase funding for legal assistance related to home ownership preservation, home foreclosure prevention and tenancy associated with home foreclosure.  H.R. 5830, including the language in the Watt-Velazquez-Green Amendment championed by Congressman Green, passed out of committee today and may be included in a second economic stimulus package aimed at providing relief for American families adversely impacted by our nation’s economic down-turn.

“Increasing numbers of foreclosure victims are turning to legal services programs for assistance,” Rep. Green stated.  “Housing experts at non-profit community groups, who are the first line of defense for homeowners in trouble, do not have the staff to handle the amount of people seeking assistance and are in need of more trained attorneys to deal with the complicated legal issues homeowners face as they attempt to avoid foreclosure.”

The Watt-Velazquez-Green amendment will require NeighborWorks (a national nonprofit organization created by Congress to provide financial support, technical assistance, and training for community-based revitalization efforts) to make $35 million worth of grants to State and local legal organizations, or to Department of Housing and Urban Development-approved counseling intermediaries, to provide legal assistance related to home ownership preservation, home foreclosure prevention and tenancy associated with home foreclosure.  In addition, at least 60 percent of these funds must be allocated for legal assistance to low-income homeowners or tenants.  Priority will be given to local organizations and attorneys that provide legal assistance in the 100 metropolitan areas with the highest home foreclosure rates and have the capacity to begin using the financial assistance within 90 days after the receipt of the assistance.

“The Watt-Velazquez-Green amendment will provide a helping hand and provide legal assistance to those homeowners and renters in areas struggling with the biggest foreclosure problems,” Rep. Green stated.  “Borrowers and homeowners are trying to do what is right, but they often do not have and cannot afford the legal advice they need – legal advice that can make a meaningfully positive difference.”