Dodd Announces Senate Passage of His Helping Families Save their Homes Act

Legislation Creates New Tools to Prevent Foreclosures, Protects Renters, Increases Availability of Credit

May 7, 2009 – (RealEstateRama) — Senator Chris Dodd (D-CT), the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, praised today’s Senate approval of his legislation aimed at preventing foreclosures and increasing the availability of credit for consumers and businesses. The “Helping Families Save Their Homes Act,” which is cosponsored by Banking Committee Ranking Member Richard Shelby (R-AL), would provide more tools to borrowers and banks to help prevent foreclosures and makes it easier for homeowners and loan servicers to use those tools. The legislation also includes important new protections for renters who find themselves facing eviction because their landlord is in foreclosure.

“In communities across the nation, the scourge of foreclosure is a deepening problem – in my home state of Connecticut alone, it is projected that some 17,700 homes will go into foreclosure in 2009,” said Dodd. “This bill will equip homeowners and lenders with new and improved tools to combat foreclosures, and it will ensure that the tools are easier to use. It will also help banks to increase their lending to small businesses and American consumers. While this bill is not a cure-all for our nation’s economic troubles, it makes important contributions towards the protection of American homeownership and a healthier banking system.”

Among other provisions, the Helping Families Save Their Homes Act would:

• Expand Access To The HOPE For Homeowners (H4H) Program. Dodd’s legislation updates the H4H program to make it more user-friendly and effective, including: lowering fees; streamlining borrower certification requirements; banning millionaires from the program; and allowing for incentive payments to servicers and originators to participate in the program.

• Increase Funding For Foreclosure Prevention Efforts By $130 Million. Dodd’s bill includes an additional $130 million for foreclosure prevention efforts including counseling, additional fair housing field employees, and educating the public about foreclosure scams.

• Establish Protections for Renters Living in Foreclosed Homes. One of the overlooked problems in the foreclosure crisis has been the eviction of renters in good standing from homes that go through foreclosure because the owners of those homes, unbeknownst to the renters, have not been paying their mortgages. The bill will require the bank that forecloses on a home to honor the existing leases or, for renters on month-to-month leases, provide a minimum of 90 days notice. If the bank sells the property to an owner-occupant, 90-days notice would be required. The bill provides parallel protections to section 8 tenants.

• Provide Comprehensive New Resources for Homeless Americans. The bill consolidates homeless programs to improve effectiveness and streamline administration. It focuses resources on the fastest growing segment of the homeless population – families with children – as well as the chronically homeless. It also authorizes $2.2 billion for homeless programs.