Las Vegas Mayor Oscar B. Goodman will testify before the House Financial Services Committee in Washington, D.C. today regarding a bill that would help people on the verge of losing their homes. The hearing is scheduled to take place at 10 a.m. on Thursday, April 10.
The bill would allow the Federal Housing Administration (FHA) to insure up to $300 billion worth of refinanced loans to help get borrowers out of mortgages they cannot afford.
The legislation also would provide $10 billion to states in the form of loans and grants for the purchase and rehabilitation of vacant, foreclosed homes with the goal of occupying them as soon as possible. With these funds, nonprofit organizations and state and local governments can acquire bank and government owned properties below market value, perform any necessary rehabilitation and sell or rent them to qualified individuals.
The mayor plans to testify that the FHA Housing Stabilization and Homeownership Retention Act is needed to address the ongoing subprime mortgage foreclosure crisis. The mayor also supports an expanded role for the Federal Housing Administration in helping qualified borrowers refinance their subprime loans that they cannot afford to an affordable long-term fixed rate mortgage.
“The mortgage crisis is having a tremendous negative impact on existing neighborhoods and cripples the city’s efforts to create safe and livable neighborhoods,” Mayor Goodman said. “I am an avid believer in the ‘broken window’ theory and attest to the fact that when properties are left unattended, it has a trickle down affect on the rest of the community. This legislation is needed to deal with the subprime mortgage foreclosure crisis and to restore our neighborhoods.”
Currently, Nevada leads the nation in the rate of foreclosures. Recent statistics show more than 90 percent of the statewide foreclosures are occurring in Clark County. Due to the subprime lending practices, the number of foreclosures has tripled in Clark County in just the past year. Property values have dropped in Las Vegas by 20 percent and nearly half of all the homes currently on the market are due to foreclosures.
There is also an important loss of tax revenue to state and local governments. The construction industry represents 10 to 12 percent of the local economy, and the issues created by slumping home sales, foreclosures sales and the post-subprime lending credit crunch have negatively impacted all of the city’s major revenue sources.
The mayor will also ask that the committee modify the legislation and consider an approach that U.S. Senator Harry Reid of Nevada and others in the Senate are proposing, which is to use the existing Community Development Block Grant program to deliver this much needed help, rather than creating a state-based program that will further delay the process.
