Press Release of U.S. Senator Barbara Boxer
|For Immediate Release: |
September 18, 2008
Washington D.C. Office (202) 224-3553
Boxer Works to Ensure Foreclosure Counseling Funds Reach Hardest Hit Areas
Washington, DC – U.S. Senator Barbara Boxer (D-CA) today wrote a letter calling on the CEO of NeighborWorks, the organization charged with distributing millions of dollars of counseling funds to help at-risk homeowners avoid foreclosure, to ensure that the funds are distributed quickly and reach the areas in greatest need. Boxer expressed concern that an earlier round of counseling funds, distributed by the same organization, were not distributed proportionately to the areas hardest hit by the foreclosure crisis. California received only 11 percent of counseling funds, despite accounting for more than 25 percent of all foreclosures.
The text of her letter follows:
September 18, 2008
Kenneth D. Wade
Chief Executive Officer
1325 G St., NW, Suite 800
Washington, DC 20005-3100
Dear Mr. Wade:
I am writing to urge a speedy and equitable distribution of the grant funds appropriated to the Neighborhood Reinvestment Corporation (NRC) through the "Housing and Economic Recovery Act of 2008." As you know, this law, which was enacted to provide immediate assistance and relief to homeowners at risk of foreclosure, provides $180 million to NRC to issue grants to organizations providing foreclosure loss mitigation and legal counseling services. It is essential that this money be distributed not only in a timely manner, but also reach the communities hardest hit by the foreclosure crisis.
NRC was tasked with distributing $180 million in grants for foreclosure counseling from the FY 2008 Appropriations bill. While NRC was successful in disbursing over $130 million of those funds quickly, I was very disappointed that the funds were not distributed proportionately to the hardest hit communities. During that round of funding, California received only $15,215,779, about 11 percent of the overall funds disbursed, despite accounting for approximately 25 percent of all foreclosure activity.
The authorizing legislation for both rounds of funding states that NRC shall "provide mortgage foreclosure mitigation assistance primarily to States and areas with high rates of defaults and foreclosures." According to RealtyTrac, between January and July of 2008, California homeowners were subject to 459,499 foreclosure filings, a rate of one filing for every 29 households and over 26 percent of the total number of filings during that period. With the second highest rate of foreclosure filings in the nation and nearly double the number over the next closest state, and over five times the third, it is essential that California receive an equitable proportion of these counseling resources.
In meeting with people across my state I have heard that when counselors sit down with a mortgage lender and a homeowner, miracles can happen. We need to make more of these miracles possible. Timely and equitable distribution of the new funds will help as many as 250,000 families work with their mortgage servicer or lender to find a way to keep their home. The communities hardest hit by the foreclosure crisis deserve our priority attention and I ask that you share with me your plan for ensuring that such communities in California and elsewhere receive the bulk of the current funding.
My office is helping to spread the word that these grants are available, and stands ready to assist in any way we can. Thank you for your attention to this issue and I look forward to working together to providing real assistance to families in need.
U.S. Senator Barbara Boxer