Letter to Barack Obama, President of the United States - Housing Plan to Provide Relief and Stability
Letter
Titus Letter To Obama On Housing Plan For Short-Term Relief And Long-Term Stability
Congresswoman Dina Titus of Nevada's Third District sent the following letter to President Obama today on her plan to address the housing crisis to provide short-term relief to families as well as long-term stability. Titus has been sending letters to the President for the last few months to keep him updated on the housing challenges Nevadans are facing.
Below is the text of the letter.
March 12, 2010
The Honorable Barack Obama
President of the United States
1600 Pennsylvania Avenue
Washington, D.C. 20500
Dear President Obama.
Thank you for visiting Las Vegas and my congressional district last month. I am pleased that you were able to hear first hand from my constituents about the challenging economic situation in Southern Nevada. I hope that got a real sense about the problems that Southern Nevadans are facing every day.
As you know, Southern Nevada was labeled "ground zero" of the foreclosure crisis by HUD Secretary Shaun Donovan during a visit last summer, so it is fitting that you announced your administration's intention to provide $1.5 billion for the states that have been hardest hit by the foreclosure crisis in Las Vegas. I want to applaud you for this decision and I hope that this will be just the first step your administration takes to help homeowners in the hardest hit areas.
Last week, I offered a proposal to the Nevada Housing Division (the state's Housing Finance Agency) regarding its forthcoming application for funding. Nevada's maximum funding allocation is $102.8 million and it is important that this funding is used to help as many homeowners fight foreclosure as possible.
It is my understanding that some of the states slated to receive a portion of this funding are considering implementing programs that will provide either loans or grants to struggling homeowners. While these types of programs may be effective in some states, I am concerned that they will be nothing more than a "band aid" in Southern Nevada where 70 percent of homeowners are "underwater" on their mortgages and unemployment is at 13 percent. It is estimated that nearly 100,000 homeowners in Nevada are in danger of losing their homes through foreclosure in the near future. Because housing prices have fallen nearly 50 percent from their peak just a few years ago, many homeowners are hopelessly "underwater." While a grant may allow these homeowners to make a few mortgage payments, when the assistance period ends, the vast majority of these homeowners will still be upside down on their mortgages. If a loan program is instituted, these homeowners will not only still have an "underwater" home, but will then have loan payments to make as well.
I believe these funds should be used in ways that not only help families avoid foreclosure in the next few months, but also help build long-term financial stability. Because so many homeowners are "underwater," the only long-term solution is principal forgiveness. In the past few months, the level of "short selling" has risen dramatically as lenders are often agreeing to sell the home to a new owner for significantly less than the value of the mortgage. Short sales are likely to increase again in April with the expansion of "Making Home Affordable" incentives. Rather than forcing families to leave their homes through short sales, it would be better for neighborhoods and communities if lenders would simply reduce the mortgage principal for the family currently living in the home in exchange for an equity sharing agreement. It is estimated that more than 60 percent of distressed sales are to investors with no intention of ever occupying the property, speculators, if you will, who got us into this problem in the first place.
I hope that you will join me in supporting solutions that provide long-term stability, not band aids for the foreclosure crisis.
Sincerely,
Dina Titus
Member of Congress
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