Introduction of the Housing Financial Literacy Act of 2015

Floor Speech

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Mr. Speaker, to this day we, as a country, are still working through the devastating effects of the foreclosure crisis. This avoidable tragedy was caused in part by predatory lenders taking advantage of homebuyers who had little or no understanding of the purchases they were making. That is why, in recognition of Financial Literacy Month, I introduced legislation entitled, ``the Housing Financial Literacy Act of 2015.'' This bill would give first-time homebuyers who complete a Department of Housing and Urban Development or HUD-certified housing counseling course a discount on their Federal Housing Administration (FHA) mortgage insurance premiums of 25 basis points (or 0.25 percent).

For many Americans, owning a home is the cornerstone of achieving the American Dream. Homeownership not only benefits the homeowner's family and surrounding community, it is also linked to improved health and school performance for children. Additionally, FHA provides the gateway to affordable housing for these individuals and families. However, for many prospective first-time homeowners, the process of purchasing real estate may be confusing and daunting and may leave uninformed buyers victims of unaffordable or predatory loans.

The Housing Financial Literacy Act of 2015 would motivate first-time homebuyers to seek vital pre-purchase housing counseling to alleviate the confusion and fears associated with purchasing real estate. These housing counseling programs help prospective homebuyers understand their financing and down-payment options, evaluate their readiness for a home purchase and navigate what sometimes may be a confusing and difficult process. In fact, studies have shown that homebuyers who receive pre-purchase housing counseling courses are nearly one-third less likely to fall behind on their mortgage, and that housing counseling can improve prospective borrowers' access to affordable, prudent mortgage loans.

These programs are so important that just last week, HUD awarded more than $36 million in housing counseling grants to hundreds of national, regional and local organizations to help families and individuals with their housing needs and to prevent future foreclosures. Consequently, an additional benefit of housing counseling is a reduction in delinquencies or default by better-informed first-time homebuyers. The Housing Financial Literacy Act of 2015 would encourage first-time homebuyers to take advantage of these critical counseling resources that can increase their financial literacy skills and capabilities.

Mr. Speaker, ensuring that first-time homebuyers have the knowledge and tools necessary to be successful homeowners is an objective that we can all share. I would like to thank the Members of Congress who signed on as original co-sponsors of this bipartisan bill, including the Democratic and Republican Co-Chairs of the Financial Literacy Caucus, and urge my colleagues to join in our efforts to increase financial literacy by adding their names to the Housing Financial Literacy Act of 2015.

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