Housing crisis:

Program expanded to help more underwater homeowners

Reid, Titus tour Las Vegas neighborhood hit hard by foreclosures

Jinae West

U.S. Department of Housing and Urban Development Secretary Shaun Donovan speaks Wednesday with U.S. Rep. Dina Titus (D-Nev.), right, during a tour of a Las Vegas neighborhood hit hard by foreclosures. HUD today announced an expansion of President Obama’s Home Affordable Refinance Program.

By Jinae West (contact)

Published Wednesday, July 1, 2009 | 11:29 a.m.

Updated Wednesday, July 1, 2009 | 1:16 p.m.

Mortgage help news conference

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Foreclosure news conference

Senate Majority Leader Harry Reid (D-Nev.), joined by U.S. Rep. Dina Titus (D-Nev.) and U.S. Housing and Urban Development Secretary Shaun Donovan, toured a Southern Nevada neighborhood Wednesday hit hard by foreclosures.

Reid and Donovan walked down Pine Valley Drive, seeing for themselves the abandoned and unkempt houses that line the street. A podium was set up in front of a duplex. On one side was a newer-looking house with green vegetation; on the other, a foreclosed house with a "For sale" sign and a dull, brown lawn.

At the news conference, Donovan said more people would be eligible to qualify for refinancing under the Obama administration's Home Affordable Refinance Program. With the expanded eligibility requirements, he said the program now will allow homeowners who owe between 80 percent and 125 percent of their home's value to refinance. He said it does not require payment up front to participate in the program.

"I am also pleased to announce today that we will be bringing in HUD reinforcements on the ground here in Nevada to help Nevadans cope with the housing and economic crisis and give them the support and resources they need for long-term growth and sustainability in their communities," Donovan said.

Nevada has one of the highest foreclosure rates in the country with one in every 64 housing units receiving a foreclosure filing during the month of May.

"Today we stand at ground zero of the economic and housing crisis," he said.

He thanked Reid for helping to usher through the Recovery Act, which he said is President Obama's plan to restart the country's economy and stabilize neighborhoods. Donovan said the act is pumping $870 million into Nevada and is expected to preserve 34,000 jobs statewide.

"Through the $14 billion HUD received in the Recovery Act," he said, "we're able to take immediate action in communities like Las Vegas."

Donovan said funds invested in the neighborhood stabilization program and money Congress allocated last summer would give hard-hit areas similar to the one they toured "the tools to purchase and convert foreclosed and abandoned homes into affordable housing."

He said the rate of foreclosure filings in Nevada is more than seven times the national average. "But with foreclosure experts on the ground here in Las Vegas, pounding the pavement and reaching out to homeowners in crisis, I am confident that we can give hope to homeowners struggling to keep their homes."

Titus said the expansion of the Home Affordable Refinance Program would help thousands more people qualify, as the previous 105 percent cutoff was not high enough to help most Nevadans because their mortgages are so far underwater.

"Because of the decrease in housing prices coupled with the high unemployment rate, people in Nevada are hurting, and it will be a tremendous help to them and it's no fault of their own," Titus said. "They've been responsible, they've done the right thing, but they've lost jobs, or hours have been cut, and every new foreclosure just kind of bites to the bone."

Peggy Edwards, 62, has lived in the neighborhood for 18 years. She resides in the duplex next to the empty house, which she said has been abandoned for at least two years. The foreclosures, she said, have hurt the community. She said her street previously had five foreclosed houses and now has only two.

But she said the street still isn't the way she remembers it.

"It's very sad because when I moved here, it was just a pretty neighborhood, and everybody kept their yards up. It was friendly, and now I don't know a lot of (neighbors) because they come and go," she said.

For more information on the Home Affordable Refinance Program, visit makinghomeaffordable.gov or call 1-888-995-HOPE.

Discussion: 10 comments so far…

By AngryReader

7/1/09 at 11:57 a.m.

Suggest removal

The fine print:

"whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac "

I have a feeling that is not a substantial number of underwater homeowners.
By ynotjohn

7/1/09 at 12:19 p.m.

Suggest removal

Also in the fine print, it must be a 1st mortgage.

I bet the vast majority of the 67% of mortgages underwater are a result of 2nd mortgages and refinancing with money taken out at closing when real estate was overvalued during 2002-2007 time frame. The taxpayers should not be funding this lifestyle financing option.

Instead another option is to convert these homeowners into renters with these overpriced mortgaged property. Why should they get the tax advantage for taking advantage of the system designed to get you started in homeownership and NOT to make money owning a home.
By AngryReader

7/1/09 at 1:30 p.m.

Suggest removal

I think I am starting to agree with your (ynotjohn) reasoning on the tax thing. I won't go so far as to refuse the mortgage deduction, because on my last two tax returns, the standard deduction was better than the itemized even with my mortgage interest, but the capital gains waiver I think was a bad mistake on Clinton's part.

That should revert to a once in a lifetime capital gains waiver, not one every 3 years.
By HookorCrook

7/1/09 at 1:39 p.m.

Suggest removal

They are missing the point. The plan cannot work without a principle reduction. It doesn't matter how many qualify, if the homeowners are upside down they will not adhere to the new terms. It is an economic no-brainer.
By henderson

7/1/09 at 1:53 p.m.

Suggest removal

I just LOVE how the same people that are bringing Cap & Tax are sitting here acting like they're trying to save anyone money or help anyone financially! Does anyone else find this ironic?
By AngryReader

7/1/09 at 3:22 p.m.

Suggest removal

Cap and trade is required to keep greedy ass capitalist corporations from dumping their waste onto the public to clean it up.

If you are to dense to see this you are a simpleton and your opinion can therefore be summarily dismissed.
By henderson

7/1/09 at 3:34 p.m.

Suggest removal

Guess what angry,

India and China will be more than willing to pick up the slack and take all these jobs, and put out all of the pollution for us. Are you for real? It's really hard to celebrate when the pollution index in the world WILL NOT CHANGE, American jobs will be lost, and everyone's energy bill will be too high. But yay for saving people's houses!!
By odeman

7/1/09 at 10:59 p.m.

Suggest removal

Wall Street is licking it's chops hoping to find a loophole so as to participate in the cap and trade. If they succeed, we'll all be broke except for the newly minted Wall Street billionaires. Quit playing games like cap and crap.
By revtomperl

7/1/09 at 11:37 p.m.

Suggest removal

Irony of life - HUD policies were a major contributor to the idea that people who could marginally afford houses were strapped with the responsibility of houses and all the other goodies of life. Now they will bail out a few. Well, good luck with that!
By ChuckL

7/3/09 at 1:13 p.m.

Suggest removal

Perhaps if "Angry Reader" would clean up his language a bit, he might be able to see that his vindictiveness against what he calls "greedy ### capitalist corporations" is self defeating.

Cap & Trade" is nothing except the largest tax program ever introduced in this country and will have the result of sending many more jobs overseas. You see "AR", all of these corporations just treat taxes as a cost of the product that they sell. They don't pay taxes. They pass them on to you and to me as a price increase in the product. We do, however, have many greedy politicians (primarily Democrats) who refuse to recognize this simple fact and continue to increase taxes on business and force up the prices that you and I have to pay. If this were not so, then those counties in other states that increase jobs and income by granting "tax moratoriums" to businesses which relocate to that county would not be successful in using this tax moratorium.

Please remember that everything that any government does for you includes not only the benefits that you get, but also benefits for everyone involved in taking the money from other citizens, counting it, deciding just who shall be included in the distributions, and of course the salary of these people. The only beneficiaries of this type of government are those who could provide for themselves, but choose not to do so, and the politicians who live on a large percentage of the taxes.