In Las Vegas this Thursday, at the Democratic debate, the elephant in the room will be housing. With the housing market meltdown, foreclosures are sweeping the country. Nevada has the worst rate with one foreclosure filing in every 61 households, while the nationwide rate is one foreclosure filing for every 196 households.
One of the few things the Federal government does to actually assist working families to gain first time homeownership is the downpayment assistance program.
I've written about the downpayment assistance issue before, with support from several of the most popular Black bloggers. The Bush Admin and HUD Secretary Alphonso Jackson has been trying to close down the downpayment program– which allows nonprofits to help qualified first time home buyers with getting the downpayment they need to move into their first home. The GAO reports that if the Bush admin is allowed to close downpayment assistance, then 40% of African-American homebuyers and potentially 30% of Latinos will be unable to utilize FHA loans and will be unable to become homeowners.
In the house, Democrats Maxine Waters and Barney Frank have championed a bill to block Alphonso Jackson's regressive efforts. In the courts, a Federal judge ruled October 31st that HUD cannot issue its decision banning downpayment assistance because of lack of a public hearing and with concern for how many people would be adversely affected.
Now with those kind of odds, shouldn't the Bush admnistration be backing down? No- and that's because they still have support in the Senate. Banking Committee Chairman Chris Dodd is still siding with the Bush administration, echoing Republican Senator Richard Selby by saying he thinks downpayment assistance ought to go…
Clearly, Eliminating downpayment assistance is just another way to put Blacks into a modern day sharecropping system the apartment renting plantation. Without rich parents and inherited wealth, many minorities are trapped in cycles of poverty…never owning assets and always renting…
Let's hope Senator Obama and Senator Clinton takes leadership of this issue that is affecting communities all over the country. Will Blitzer ask a question about how to deal with the housing crises? Will he have the cojones to challenge Dodd for supporting Bush on shutting down the lifeline to these people?
Downpayment assistance is the best way people can AVOID the predatory loans and subprime mortgages which have caused the bubble to burst. Taking downpayment assistance away will only exacerbate problems.
5 Comments
welcome to the Iowa blogosphere
I am sure the Dodd campaign will want to post their side of the story here. I am uninformed about this program.
desmoinesdem Tue 13 Nov 11:23 PM
Downside of housing assistance
Housing assistance programs are not a disinterested act of charity. The non-profits that supply these grants are themselves funded by the hombuilders, who recoup their generosity by selling houses.
These grants have enabled lots of people to buy a house, but the recipients have no savings and poor credit, and they are the most likely borrowers to default on their loans and go into bankruptcy.
Banks and mortgage lenders have benefited from housing assistance programs, because they were able to close a lot of loans that they would never have been able to otherwise. Dodd is voting against the financial industry on this one.
corncam Wed 14 Nov 10:24 AM
Rev. Al Sharpton adds his 2 cents... and by that I mean he slams Senate Dems
jhoward Thu 15 Nov 3:40 PM
Dodd's side
I’d like to set the record straight on Senator Dodd’s position on down payment assistance.
First, your attacks have been targeted at Senator Dodd and have painted him as siding with Bush. That’s just not true. The FHA Modernization Act passed out of the Banking Committee 20-1, with all Democrats supporting it – a good indication that that Dodd is not supporting the President but rather leading on an issue important to every segment of society and critical to ensure that people are able to find affordable housing and achieve the dream of homeownership.
The Center for American Progress, hardly a pro-Bush bastion, praises the legislation.
Second, I think you’re misrepresenting what these programs do. A recent Washington Post article noted that these programs often make housing costs significantly higher. “Such programs allow home sellers to give money to charities, which in turn assist buyers with their down payments. The sellers pay the charities a service fee, but often recoup the money by charging a higher price for the homes, usually 2 or 3 percent more, or an amount equal to the down payment, according to a 2005 study by the Government Accountability Office.”
But most important is what Chris Dodd will do as President. He’s for expanding homeownership for all Americans and has a plan to make it easier for people to get down payment assistance without endangering them financially.
You can read his full homeownership plan here: http://chrisdodd.com/issues/homeownership/
Lastly, as you’ve copied and pasted an identical diary about two dozen times at different progressive community sites, I’m posting this response in multiple locations to ensure everyone can see Dodd’s side of the story, complete with links and sourcing.
matt-browner-hamlin Fri 16 Nov 5:03 PM
Dodd hacks all over the Internet, I see
Matt Browner Hamlin, a paid blogger for the Dodd Presidential campaign, has been attempting to white wash his boss’s actions on downpayment assistance programs. I have been trying to shine some light on Dodd’s refusal to join with Democrats in the House to prevent Bush’s Secretary of HUD, Alphonso Jackson, from nixing downpayment assistance programs.
Hamlin is attempting the transparent strawman that opposition to Dodd and HUD equals opposition to the FHA reform bill. No, the problem is that within the bill, Dodd is pushing a provision in the Senate which allows HUD to eliminate downpayment assistance programs. The House version, supported by Rep. Maxine Waters, Rep. Gary Miller, and Rep. Barney Frank denies HUD from implementing their painful ruling. We all support reform to help allay problems relating to the housing crises, but we shouldn’t be exacerbating conditions for minorities by abandoning the programs that work.
The program has overwhelmingly served poor African American and Latino families. Over 600,000 people have become first time homeowners from the program in the last decade. The accusation is that in some areas the program has been used to inflate housing prices and lead to foreclosures. However, according to an independent report by Experian, the largest and most credible downpayment assistance programs actually have lower default rates than the FHA portfolio.
Here is a Reuters article on the momentum building to stop Dodd from quietly pushing a provision within the FHA reform bill to allow HUD to destroy downpayment asssistance programs. Once the public really gets an understanding of what he is doing, pushing more people into predatory loans and keeping FHA insured loans far out of reach for those who need them most, I doubt many people fill believe much Dodd has got to say on many other issues…
jhoward Tue 20 Nov 4:51 PM