After nearly a decade of trying, Democrats will again push for legislation this year estab- lishing an assistance program to help families on the verge of foreclosure make their mort- gage payments for up to three years.
The program, which would apply only to government-insured mortgages such as FHA- and VA-backed loans, would allow borrowers to keep their homes by making monthly payments not to exceed 35 percent of their incomes.
The government would cover any addition- al amount owed to lenders for up to three years, at which time those receiving assistance would be expected to resume making full mortgage payments. Beneficiaries would be required to repay the program for the assis- tance they received, plus interest.
Attempts to establish the program under the authority of the Department of Housing and Urban Development date back to 1998, when Rep. Luis Gutierrez, an Illinois Democrat representing parts of Chicago in Congress, introduced the Homeowners’ Emergency Mortgage Assistance Act, or HEMA.
The bill, HR 4745, had no co-sponsors and was promptly referred to the Subcommittee on Housing and Community Opportunity and never heard from again.
When Gutierrez reintroduced the bill again the following year as HR 595, it gained the support of 56 co-sponsors, including Democrats Nancy Pelosi of California and Barney Frank of Massachusetts.
Pelosi is now Speaker of the House, and Frank is chairman of the House Committee on Financial Services. But in 1999, with
Republicans in control of Congress, the HEMA bill was once again referred to the Subcommittee on Housing and Community Opportunity, where it died.
It would be four years before Pennsylvania Democrat Rep. Chaka Fattah resurrected a nearly identical version of the bill, HR 1357. That incarnation of HEMA, introduced in 2003, languished in the same committee as its predecessors.
When Fattah introduced the most recent version of HEMA as HR 378 in January 2005, it had the support of 19 co-sponsors, includ- ing 11 members of the Congressional Black Caucus, but not Pelosi, Frank or Gutierrez. It, too, was disposed of in the Subcommittee on Housing and Community Opportunity with- out coming to a vote.
Fattah says he plans to reintroduce yet another HEMA bill soon, and his staff is hopeful that it will have the support of lead- ing Democrats, including Pelosi and Frank.
The Philadelphia Congressman’s communi- cations director, Debra Anderson says HR 378 received limited support because Democrats had other issues that were higher priorities, not because those who had supported the bill in the past had changed their stance.
“I would suppose those same people [who co- sponsored previous versions of the bill] will sign on,” Anderson says, including Pelosi and Frank.
Fattah’s legislative director, Nuku Ofori, says the Congressional Budget Office has not made a recent estimate of the cost of the pro- gram, which would require funding through a separate appropriations bill. Ofori said that
U.S. Rep. Luis Gutierrez, D-Ill.
based on a previous estimate, the cost could be $50 million or more.
A spokesman for Gutierrez, the sponsor of the original HEMA legislation, says the Congressman is “definitely supportive” of Fattah’s effort.
“Now that the Democrats are in control of Congress, a lot of bills that had simply been referred to committee will have more of an opportunity to move forward” in 2007, says Scott Frotman, Gutierrez’s press secretary.