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FOR IMMEDIATE RELEASE |
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Rep. Peter
J. Daley |
    
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Daley, Siptroth, and Longietti announce housing trust fund and mortgage foreclosure rescue program
Legislation aims to salvage homes caught in mortgage crisis
HARRISBURG, June 18 – At a Capitol news conference today, House Commerce Committee Chairman Peter J. Daley, D-Washington/Fayette, led the unveiling of legislation aimed at creating both a Pennsylvania Housing Trust Fund and a mortgage foreclosure rescue program.
"During the last year, the committee has investigated the need for reform of our mortgage laws," Daley said. "But we also recognized an urgent need to do something to salvage the homes and lives of the families already caught up in this crisis, which continues to grow daily."
House Bill 2600, sponsored by Daley, would create a housing trust fund and would allow and enable the Pennsylvania Housing Finance Agency to build or rehabilitate and preserve housing for low- to moderate-income people, the elderly, and people with disabilities.
House Bill 2602, introduced by state Reps. John Siptroth, D-Monroe/Pike, and W. Curtis Thomas, D- Phila., would establish a foreclosure rescue program to aid in transferring families from unaffordable, adjustable-rate mortgages to fixed-rate mortgages, with the PHFA to assist in renegotiating alternative payment plans with the original lender.
State Rep. Mark Longietti’s bill, H.B. 2601 is a companion bill to H.B. 2602 and would appropriate $10 million to PHFA to reimburse the agency for losses incurred in assisting homeowners at risk of foreclosure because of either adjustable-rate mortgages or because the value of the mortgage exceeds the value of the property.
"People will still pay for the full value of their homes," emphasized Longietti, D-Mercer. "This fund will just help PHFA absorb some of the possible losses in administering a program like this."
The rescue program would be funded mainly by the sale of bonds by PHFA; payments from homeowners would repay the bonds.
Joining Daley and the prime sponsors on the Capitol steps were members of the House Commerce Committee, officials of the Pennsylvania Housing Finance Agency and a broad spectrum of business and community groups.
With regard to the affordable housing trust fund, Daley noted that more than 15,000 Pennsylvanians are homeless and more than 90,000 families statewide are on various housing authority waiting lists.
"These numbers are staggering and completely unacceptable," Daley said. "Pennsylvanians need help and deserve to have safe, decent and affordable homes. Providing adequate housing is critical to the economic vitality of communities."
Thirty-eight other states have already created such funds to stimulate production of affordable housing. Pennsylvania's fund would be overseen by an advisory committee that includes representation from builders, municipal housing and redevelopment authorities, housing advocates, the governor's office and a member of the four legislative caucuses.
"A statewide trust fund will greatly enhance the Pennsylvania Housing Finance Agency’s ability to provide good homes and apartments across the Commonwealth," said PHFA Executive Director Brian A. Hudson Sr.
In addition to the housing trust fund, two bills to create a mortgage foreclosure rescue program were also unveiled at the news conference.
"The foreclosure crisis in my district looks set to continue as the economy worsens and consumer costs increase," Siptroth said. "Many of the homeowners who are visiting my district office for counseling through the United Neighborhood Centers of NEPA are in trouble because of reduced earnings or redundancy. The weakening economy is pushing people over the line and, through House Bill 2602, I hope to assist them in restructuring their borrowing so they can continue to make mortgage payments and keep a roof over their families' heads."
"Pennsylvania continues to represent a bright light of hope for hard-working and elderly Pennsylvanians who are faced with economic and social challenges, which threaten their health and safety," Thomas said. "This proposed legislation this morning represents another step in the right direction towards relief."
"The mortgage crisis has become one of the most pressing issues facing homeowners nationwide," Longietti said. "Statistics show that in February, the number of Pennsylvania properties with foreclosure filings had risen 22 percent from 2007, and 43 percent alone since January. And we have nearly 25,000 existing adjustable-rate mortgages scheduled to reset this year. My bill would help the PHFA offer programs to keep Pennsylvanians in their homes."
Pennsylvania had almost 6,000 foreclosure filings in the first quarter of 2008. That number is up 7.6 percent from the last quarter of 2007.
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