Right to Rent Act, H.R. 5028
Ms. KAPTUR. Mr. Speaker, in each of the last 14 years, Ohio has set a record for the number of foreclosures, and this year is on track to be no exception. Every year a new record. That is hard to imagine, and not what I want to say about my home State.
Over the last 2 years, Congress has passed what I call hollow legislation that looks like it might stem the tide of foreclosures, but clearly the programs were not intended to work. Then, next, Treasury decided to make homes affordable, they say, by using some of the TARP bailout money, the Troubled Asset Relief Program that was passed back in the fall of 2008 to bail out the Wall Street speculative banks. According to The Wall Street Journal last week, of the handful of homeowners who have now been so-called ``helped'' by Treasury out of the millions and millions that are in trouble, even Treasury's reported that only one in four of the few helped to try to get their mortgage payment to be affordable have now been even more weeded out of that program. This is like the great shrinking blimp. You sort of promise them everything, but give them nothing, and the gas just drains right out of the balloon.
The overall program in fact is voluntary and aimed to protect the investor, not the homeowner. People today who are in the program and trying to save their homes are depleting their savings so when they get kicked out of the administration's programs, they are more poor and assured of losing their homes and with little, if anything, to survive on. People are still losing their homes. We are not stemming the tide of foreclosures. You think somebody here in Washington would notice that.
That's why I joined with my esteemed colleague, Representative Raul Grijalva, and introduced the Right to Rent Act of 2010, H.R. 5028. And we invite our colleagues to join us. This bill creates a right to rent for homeowners facing foreclosure. The bill is going to help a good portion of those 6 million delinquent homeowners transition from foreclosure to renting a home. And if communities are wise and adopt the old turnkey program, kind of resurrect that, then after 5 years if your payments are good you can end up owning your home, help to save our neighborhoods, save our communities by saving the families who don't deserve to be thrown out.
Right to Rent would allow families to stay in their home and keep their family stable, while lowering the family's monthly housing costs by extending the term. In the meantime, the mortgage holder receives a fair market rent on their property. Keeping both families and mortgages stable strengthens communities rather than leaving homes barren and families on the street.
In some communities in Ohio, entire neighborhoods are now vacant. Who does that help? Aiming relief directly at middle income homeowners, not speculators or people living in unaffordable mansions, the Right to Rent Act of 2010 allows homeowners facing foreclosure to stay in their homes at a fair market rent for 5 years.
Specifically, to be eligible, the home must be a single-family property, a condominium with an undivided interest in common areas, or a similar dwelling in a multi-unit project that has been occupied for at least 2 years. The mortgage must have been originated before July 1, 2007. Furthermore, the home must have been purchased at or below a median purchase price for the local metropolitan area as measured by the National Association of Realtors.
The homeowner, upon receiving notice of foreclosure on an eligible property, has 25 business days to petition the court to exercise his or her right to rent the home for up to 5 years at a fair market rate as determined by a court-appointed independent appraiser. The bill does not change existing State foreclosure laws or landlord-tenant laws.
In addition, the Secretary of Housing and Urban Development will monitor compliance with the program. In addition, this right to rent sunsets 5 years after date of enactment. It's not meant to be around forever.
Judges can transition middle-income family home foreclosures to rental agreements in a manner consistent with common sense and justice.
Right to Rent is but one tool, a workable one, to address our Nation's housing crisis and help stabilize not only our community but also our Nation's mortgage economy.
The Right to Rent provides a strong incentive for lenders to modify mortgages, including principal write-downs, to avoid becoming landlords. If the lender chooses to pursue foreclosure, the family can go to court to rent their home, thus preventing the spiral of vacancy, social problems, crime, and lower property values in neighborhoods that follow mass vacancies.
Right to Rent is backed by real world results. A model similar to H.R. 5028 is currently used on a limited basis by Fannie Mae and Freddie Mac.
Mr. Speaker, I urge my colleagues to join me and RAÚL GRIJALVA in cosponsoring H.R. 5028 to stem the tide of foreclosures still sweeping across this country.
BREAK IN TRANSCRIPT
Source