Consumers

American Housing Rescue and Foreclosure Prevention Act of 2008

hmoroz — Fri, 25 Jul 2008 11:21:47 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percent increase of foreclosure filings from June 2007 to June 2008: 53

Approximate value of mortgages that Fannie Mae and Freddie Mac own or guarantee: $5.2 trillion

Total residential mortgage debt outstanding in the first quarter of 2008: $12.1 trillion

Total outstanding public debt: $9.5 trillion

Percentage of new mortgages Fannie Mae and Freddie Mac currently originate or guarantee, according to Treasury Secretary Henry Paulson: 70

Number of homes that will experience devaluation because of subprime foreclosures that take place nearby: 40.6 million

Average decline in property values for homeowners living near foreclosed properties, in dollars: 5,000

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. As many as 2.5 million families could lose their homes to foreclosure in 2008. At the same time, growing doubts about the solvency of Fannie Mae and Freddie Mac threaten to further destabilize the entire U.S. economy. Congress is not acting a moment too soon..

The refinancing program created by the American Housing Rescue and Foreclosure Prevention Act will have concrete results for middle-class homeowners facing the frightening prospect of foreclosure. Although participation in the program is voluntary for lenders, many are expected to participate and the measure is projected to keep approximately 400,000 homeowners from losing their homes. Because the bill forces lenders to write down the principal, the program does not offer a bailout to mortgage lenders. Since irresponsible lending is a major cause of the current financial and home equity crisis, the effort to restrict the taxpayer funded bonanza for these lenders is beneficial. Paying for the program through the Affordable Housing Trust Fund, which is funded by the GSEs, means that taxpayers are not stuck with the bill of refinancing.

The $4 billion of CDBG funds authorized by the legislation addresses two important problems plaguing aspiring middle-class Americans: the community breakdown that can result from vacant foreclosed homes in neighborhoods across the country and the lack of affordable housing in many communities. Middle-class Americans who are current on their mortgages and face no personal risk of foreclosure are nevertheless harmed when a foreclosed home down the street brings down property values, erodes the local tax base, and threatens to become a magnet for crime. The Center for Responsible Lending has shown that approximately 40.6 million homes will experience devaluation because of nearby subprime foreclosures, that homeowners living near foreclosed properties will lose approximately $5,000 on the value of their homes, and that approximately $200 billion dollars in house values and tax base will be lost from nearby foreclosures. By funneling federal money to local agencies to serve lower- and extremely low-income individuals, the CDBG funds will help neighborhoods recover from the harm done to their communities by foreclosures while helping to ensure that neighborhoods can accommodate aspiring middle-class Americans.

While the Congressional Budget Office believes that there is a 50% or better chance that Treasury will not have to use its new authority to purchase stock in the GSEs, the enactment of this authority reassures markets that the federal government is willing to serve as a backstop if Fannie Mae and Freddie Mac continue to falter. Because these secondary mortgage lenders hold or guarantee approximately half of all mortgages, their failure would have devastating consequences for middle-class families and the American economy as a whole. The promise of a bailout is regrettably necessary to prevent further market destabilization.

Increased oversight of the GSEs will be crucial to ensuring that the government-backed entities minimize taxpayer risk, while making mortgages affordable to middle-class Americans. Standards for a mortgage licensing and registration system and enhanced mortgage disclosure requirements are forward-looking measures that will help prevent the predatory lending and other improper lending practices that contributed to the foreclosure crisis.

Quotes from Experts

Beyond this Bill

Additional Resources

Mortgage Lending, from the Center for Responsible Lending

Housing Policy, from the Center on Budget and Policy Priorities

A Brief History of Fannie Mae and Freddie Mac, from Time

Saving Energy Through Public Transportation Act of 2008

hmoroz — Wed, 16 Jul 2008 16:12:43 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Net oil savings from the use of public transportation in 2006, according to USPIRG: 3.4 billion gallons

Dollar amount of this savings at today’s gas prices: 13.6 billion

Amount spent by households in neighborhoods with the best access to transit routes on all transportation costs, including gas, insurance, upkeep, and transit fares: $728

Amount spent by households in neighborhoods with the least access to transit: $925

Increase in public transportation use since 1995: 32%

Price of a gallon of gasoline on June 25, 2008, the date on which President Bush issued a veto threat for the Saving Energy Through Public Transportation Act: $4.07

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. With gas prices hovering at $4.00 a gallon, middle-class Americans are feeling the squeeze. While there are no quick fixes, public transportation is becoming an increasingly appealing option for more middle-class Americans. A recent report shows that households with the best access to public transportation routes spends an average of $728 a month on transportation costs, while households with the worst access spend almost $200 more. The American Public Transportation Association (APTA) has found that high gas prices, congestion, and expanded public transit services have led to a 32% increase in public transportation use since 1995 and that the average annual household savings from using public transportation is $6,251. Public transportation is also an effective means to support environmental sustainability. Net oil savings from public transportation were estimated to be 3.4 billion gallons in 2006 and public transportation reduces carbon dioxide emissions by 37 million metric tons each year.

Quotes from Experts

Beyond this Bill

Additional Resources

Transportation Resources, from Smart Growth Online

"A Bridge to Somewhere: Rethinking American Transportation for the 21st Century," from the Brookings Institution

"Squandering the Stimulus: An Analysis of Household Gas Spending, Economic Stimulus Checks, and the Need for Better Transportation Options," from USPIRG

Foreclosure Prevention Act of 2008 [Revised Bill]

atraub — Thu, 10 Apr 2008 14:37:17 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Amount of mortgage-related assets that the Federal Reserve assumed as collateral for a loan it made to facilitate the sale of Bear Sterns to J.P. Morgan Chase: $30 billion

Amount this bill provides in tax refunds for businesses that claim a loss: $6.1 billion

Amount this bill provides to state and local governments across the country to shore up neighborhoods devastated by mortgage foreclosures: $4 billion

Estimated number of foreclosures prevented if Congress lifted the ban on loan modifications by bankruptcy courts, a provision this bill does not include: 600,000

Amount of home equity saved if Congress lifted the ban on court-supervised loan modifications that would otherwise be lost because of foreclosures of neighboring properties: $72.5 billion

Amount that lifting the ban on court-supervised loan modifications would cost middle-class taxpayers: $0

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. With two million families facing the loss of their homes over the next two years and large sectors of the U.S. economy destabilized by mortgage defaults, the foreclosure crisis and the wider turmoil it has caused are among the greatest threats to middle-class Americans today. This bill responds to that threat, although not in the most effective way. The bill is stuffed with costly and irrelevant provisions, while the positive steps it does include fail to go far enough to help struggling families. The single most effective measure proposed to address the crisis – a change in bankruptcy law that would prevent hundreds of thousands of foreclosures – was killed as an amendment. Meanwhile some provisions that did make it into the final bill could even make the foreclosure problem worse.

Positive measures in the bill include FHA modernization, which will enable more homeowners to refinance problematic mortgages. The block grants for communities hard hit by the crisis to reclaim foreclosed properties and turn them into affordable homes is another very positive step, but here too the amount of funding may be too little to revitalize neighborhoods in need. Funding for mortgage counseling is also beneficial, but inadequate. And while enhanced mortgage disclosures are helpful, they are no substitute for a genuine ban on deceptive lending practices along the lines enacted by some state governments. The tax exempt bonds for state agencies to refinance subprime loans is a modest effort which will inevitably bail out lenders, whose lax standards helped cause the crisis, along with struggling homeowners.

While provisions to help homeowners and devastated communities are stingy, home builders and other businesses facing economic losses due to the downturn reap $6.1 billion in tax breaks. This provision has little to do with helping prevent foreclosure and is not even a cost-effective means of economic stimulus. The property tax deduction for non-itemizers is similarly problematic. While many middle-class families might see a small tax break under this provision, the credit is not substantial enough to help families who face foreclosure or are having serious difficulties making mortgage payments and is not targeted at these homeowners. To make matters worse, the deduction is limited to people who live in areas that have not raised property taxes. This creates an incentive for states and municipalities to cut services that middle-class families rely on rather than raising the revenue needed to preserve them. Finally, the tax credit for buying a foreclosed home might, as the Washington Post point out, actually encourage more home foreclosures.

The alternative energy tax breaks, added at the last minute, are similar to those included in the House’s Renewable Energy and Energy Conservation Tax Act. Providing the public investment necessary to jump start the development and promotion of renewable energy sources and ultimately mitigate global warming sweetens what is otherwise a unsatisfactory effort to deal with the home mortgage crisis. Middle-class Americans will ultimately see some benefit from this bill – but they deserve better.

Quotes from Experts

Beyond this Bill

Additional Resources

“Senate Housing Legislation Highly Disappointing” from the Center for Budget and Policy Priorities

Mortgage Lending page from the Center for Responsible Lending

Helping Families Save Their Homes in Bankruptcy Amendment of 2008

hmoroz — Fri, 04 Apr 2008 13:47:08 -0400

Legislation

The middle class

Opposes

Video Summary

Injustice Facts

Percentage of securitized subprime loans from the fourth quarter of 2006 that are projected to end in foreclosure: 50

Percentage increase of foreclosure filings from February 2007 to February 2008: 60

Estimated number of foreclosures that a mortgage restructuring provision for primary residences would prevent: 600,000

Number of homes that will experience devaluation because of subprime foreclosures that take place nearby: 40.6 million

Average decline in property values for homeowners living near foreclosed properties, in dollars: 5,000

Amount of wealth the Center for Responsible Lending estimates would be saved by similar legislation that would otherwise be lost because of foreclosures of neighboring properties, in dollars: 72.5 billion

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports the Durbin Amendment and Opposes this vote to kill the amendment. The federal government and the mortgage industry’s failure to address the subprime mortgage and foreclosure crisis adequately could result in as many as 1.9 million Americans losing their homes in 2008 and 2009. Despite national awareness of the dire situation throughout 2007, foreclosure filings increased 60% from February 2007 to February 2008. Extending the same bankruptcy protections to primary residences that currently apply to luxury yachts and vacation homes is not only fair, but would prevent 600,000 families from losing their homes to foreclosure. Strengthened bankruptcy protection is also beneficial to middle-class families who are not themselves facing foreclosure: protecting these 600,000 families from foreclosure would save neighbors of foreclosed properties $72.5 billion in wealth that would otherwise be lost to reduced property values. Because the Helping Families Save Their Homes in Bankruptcy Amendment restricts eligibility for bankruptcy mortgage restructuring to homeowners who are unable to afford currently existing mortgages, mortgage interest rates should not increase: only homes in danger of foreclosure will qualify and the risk of foreclosure is already calculated into current interest rates. The “homestead floor” of $75,000 for homeowners over the age of 55 who are in bankruptcy allows older middle-class Americans to protect a minimum amount of investments they have made in their homes, while preventing wealthy Americans from using large estates to shelter money from creditors.

Quotes from Experts

Beyond this Bill

Additional Resources

Testimony of Mark Zandi, Chief Economist of Moody’s Economy.com, before the Senate Judiciary Committee

Center for Responsible Lending on Court-Supervised Loan Modifications

Harvard Law Professor Elizabeth Warren on Bankruptcy Reform and the Housing Crisis

Consumer Product Safety Commission Reform Act of 2008

hmoroz — Fri, 07 Mar 2008 16:52:10 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Cost to the United States each year from deaths, injuries, and property damage from consumer product incidents: $700 billion

Appropriations for the Consumer Product Safety Commission in 1974, the year the agency was created, as adjusted for inflation:$125 million

Appropriations for the Consumer Product Safety Commission requested by President Bush for FY2008: $63 million

Number of full-time employees at the CPSC in 1974, the year the commission was established: 786

Number of full-time employees at the CPSC in 2007: 420

Number of children under the age of five who were treated in hospital emergency rooms for injuries associated with nursery products in 2005: 59,800

Number of toys recalled because of lead paint, tiny magnets, and other hazards in 2007: 25 million

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. The record-setting 473 product recalls last year made 2007 the year of the recall. Although the Consumer Product Safety Commission is responsible for protecting consumers from more than 15,000 types of consumer products, an anemic budget and staff shortages have increasingly put middle-class American consumers at risk. The Senate version of the Consumer Product Safety Modernization Act responds soundly to the dangers that consumers increasingly confront at the supermarket, at the toy store, and in their own homes. By providing the CPSC with additional funding through 2015, along with resources to improve its testing facilities, the legislation helps to ensure that competent inspectors remain vigilant of consumer safety no matter who is president. Empowering state attorneys general to file suit when they believe that residents of a state have been adversely affected by a violation of a consumer product safety rule – instead of simply to enforce a CPSC rule, as provided in the House version of this bill – creates an additional layer of consumer protection. Independent third-party testing of children’s products prevents the insidious practice by which manufacturers would certify the safety of their own goods, while mandatory toy safety standards are a commonsense response to the recent explosion of toy recalls. A database of consumer complaints about dangerous products will both educate the public about potentially harmful goods and allow consumers to voice their concerns about such products. The ban on lead in children’s products and the increase in the age level at which a product is considered to be intended for a child will benefit parents who would otherwise be unable to determine if a toy is safe. Whistleblower protections will ensure that vigilant industry employees and public employees do not fear job or compensation loss for reporting negligent manufacturing practices or poor oversight.

Quotes from Experts

Beyond this Bill

Additional Resources

Rebuttal of Myths About Senate Product Safety Reform Bill, from the Consumer Federation

“Held Back: Unfinished Consumer Product Safety Commission Rules, Class of 2007,” from Public Citizen

Recalls and Product Safety News from the CPSC

Internet Freedom Preservation Act of 2008

atraub — Mon, 03 Mar 2008 16:31:29 -0500

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Renewable Energy and Energy Conservation Tax Act of 2008

atraub — Thu, 28 Feb 2008 14:43:06 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Cost of one barrel of crude oil the day this bill passed the House:$100.83

Date on which President Bush said, “With $55 [per barrel] oil we don't need incentives to oil and gas companies to explore. There are plenty of incentives. What we need is to put a strategy in place that will help this country over time become less dependent”: 4/14/2005

Date on which the Bush Administration nevertheless announced that the President would veto this bill: 2/26/2008

Average amount per gallon Americans paid for that gas the week this bill passed the House: $3.18

Profit made by oil company Exxon Mobil every minute in 2007, according to the Center for American Progress: $77,245

Percentage of total U.S. electricity demand that could technically be met by renewable energy resources by 2020, according to the National Renewable Energy Laboratory: 100

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports: Today, as middle-class consumers struggle with the high costs of gasoline and home heating oil and are increasingly concerned about the threat of global warming, federal incentives that spur energy efficiency and promote renewable energy couldn’t be more timely. By reviving the abandoned provisions of the 2007 energy bill, this legislation offers the substantial public investment necessary to jump start the development and promotion of renewable energy sources and energy-efficient technologies. In the short term, this investment will create jobs producing renewable energy and technology. In the long term, new energy sources and more efficient technology promise environmental and public health benefits, as well as lower costs, for the American middle class. The bill also funds the investments in an appropriate way: by repealing taxpayer subsidies to the oil industry, which is already making booming profits at the expense of middle-class consumers.

Quotes from Experts

Beyond this Bill

Additional Resources

"New Energy for America: The Apollo Jobs Report for Good Jobs and Energy Independence,” from the Apollo Alliance

“Kick the Oil Habit: Stop the Subsidies” from the Center for American Progress

Consumers

American Housing Rescue and Foreclosure Prevention Act of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Saving Energy Through Public Transportation Act of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Foreclosure Prevention Act of 2008 [Revised Bill]

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Helping Families Save Their Homes in Bankruptcy Amendment of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Consumer Product Safety Commission Reform Act of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Internet Freedom Preservation Act of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Renewable Energy and Energy Conservation Tax Act of 2008