EVANSTON, IL – U.S. Representative
Jan Schakowsky (D-IL) today applauded CEDA and housing advocates for
their efforts on behalf of Chicago-area families struggling to find
a safe and affordable place to live. Schakowsky gave her
remarks during a roundtable discussion organized by Fannie Mae to
promote greater cooperation with community organizations and to
announce the expansion of an initiative to help victims of predatory
lending.
Schakowsky called on Fannie Mae to aggressively work with
community organizations to deliver assistance to victims of
predatory lenders as quickly as possible. Schakowsky is a
member of the Housing and Community Opportunity Subcommittee and is
the author of the Save our Homes Act of 2001, legislation to put
predatory lenders out of business.
Below is
the full text of Schakowsky’s
speech.
I would like to thank Fannie Mae and CEDA for inviting me to
participate in today’s roundtable discussion. The private and
public sector must work in tandem to address our state’s affordable
housing crisis. I also want to express my gratitude for the work of
CEDA and other advocates who have worked and continue to work to
ensure that the affordable housing crisis is addressed. Without your
efforts, this crisis would not be getting attention
today.
Homeownership rates continue to rise throughout the country.
Over two thirds of American families are homeowners. Unfortunately
far too many homeowners are losing their homes to predatory lenders.
Historic discrimination in the housing market adds to the problem of
predatory lending.
People who have trouble getting a mortgage from conventional
lenders are likely to use the subprime market. According to
HUD statistics, subprime lenders are three times more likely to prey
on people in low-income neighborhoods than in upper-income
neighborhoods. Five times more likely in predominately African
American neighborhoods than in white neighborhoods. Subprime
lending is twice as prevalent in high-income African American
neighborhoods as it is in the low-income white communities. Of
course not all subprime loans are predatory but clearly many of them
are and we need to end these practices that force people out of
their homes. Subprime mortgage refinancing increased ten fold in the
nineties. Well over one million families rely on the market
today. We must clean up the subprime market. We must
also act to help victims of predatory lenders keep their
homes.
I am very pleased that Fannie Mae is expanding its Anti
Predatory Refinance Initiative by dedicating an additional $5
million. Fannie Mae will now help victims throughout Cook
County.
I joined Fannie Mae when it launched this program back in
November 2000 by dedicating 5 million dollars to start the
initiative. It is my understanding that to date this pilot
program has rescued 10 families. We need to do more. It
is my hope that Fannie Mae will aggressively work with community
organizations to disperse the money in a timely fashion. I
want to work with Fannie Mae to expedite its approval
process.
We need to do more than simply help homeowners that are
ripped off by predatory lenders. We need to stop predatory lenders
from stealing people’s homes in the first place. That is why
Congress needs to pass predatory lending legislation. We need
strong federal standards that will not allow lenders to use
loopholes to escape local and sate
laws.
As you all probably know, I have introduced a bill called
“The Save Our Homes Act.” My bill has twenty cosponsors.
It creates strong consumer protections and it ensures the rights of
class action lawsuits. I hope Fannie Mae will work with
Congress to pass anti-Predatory lending legislation. I also
want to make a few comments on our national response to the
affordable housing crisis.
As you know, thirty-nine percent of Illinois families cannot
afford fair market rent for a two-bedroom apartment. One
out of five renters in Illinois spends more than 50% of their income
on rent. Furthermore, 30,000 units of project-based housing will
expire within 5 years. The problem will grow much worse if we do not
act now. Unfortunately, the Bush Administration has not made
affordable housing a priority.
While I am pleased that the Administration’s budget request
calls for renewal of existing Section 8 programs and 34,000 new
vouchers, the overall housing budget is woefully inadequate. The
Administration’s HUD budget does not aggressively confront our
country’s affordable housing
shortage.
While we spare no expense to attack terror around the world,
we must also use every resource available to provide for the
critical needs of American families. Some might argue that we
do not have the resources to provide affordable housing. I disagree.
The Bush budget calls for more tax breaks for the wealthiest
Americans and for large corporations. This is a matter of
priorities. We need to make the needs of American families a
priority. This budget simply does
not.
Over 16 million families have critical housing needs, yet
federal support for affordable housing has declined steadily since
1978. Increased homelessness is directly attributable to the federal
government’s neglect.
We need to enact a comprehensive and productive plan now.
Low- and moderate-income families regularly have to choose between
paying their rent and paying for other critical needs. We must do
better. As a member of the Housing Subcommittee, I will work to
increase HUD’s funding for affordable housing. Toward that
end, I am an original cosponsor of “ The National Affordable Housing
Act.” Congressman Sanders' (I-VT) bill would use FHA surpluses to
create a trust fund to build affordable housing and address the
housing shortage. By enacting this legislation, we could more
than triple affordable housing construction next year and provide
housing to more than 200,000 families. The bill has over 160
cosponsors and it has been endorsed by over 1,700
organizations.
Housing production will stimulate the economy. A $5 billion
investment would result in up to 1.8 million jobs and $50 billion in
wages. Instead of tax cuts for the rich, we should provide
opportunity to the most vulnerable members of our society. The
housing crisis doesn’t only impact families it has a devastating
effect on our children. For example, average reading scores for
elementary age students who moved three or more times were half of
those of students who did not move. Without question stable housing
is the cornerstone to having future opportunity. It is well worth
the investment.
I enjoy working with this dedicated group of community
leaders and I am looking forward to our future
collaboration. |