U.S. Senator Robert Menendez (D-NJ), one of the leading voices for housing policy in Congress, believes efforts should be made to turn foreclosed homes into badly-needed rental properties. Menendez, chairman of the Senate Banking, Housing and Urban Affairs Subcommittee on Housing, Transportation and Community Development, held a New Jersey field hearing Feb. 10 on “Saving Our Neighborhoods From Foreclosures.”The hearing coincided with the announcement a day earlier of a $26 billion settlement between 49 states and major banks. The agreement will bring roughly $190 million to Connecticut.
Menendez said that the settlement announcement was a “long way from healing wounds” and was just a drop in the bucket compared to the massive size of the problem. While acknowledging that the dream of owning a home “still lives,” Menendez said solutions to the foreclosure crisis should include incentives for rental alternatives. Senator Menendez expressed support for additional resources for the Neighborhood Stabilization Program as well as efforts to transition foreclosed homes into rental properties. He endorsed the strategy of Shared Appreciation Mortgages, in which a lender agrees to an interest rate lower than the prevailing market rate, in exchange for a share of the appreciated value of the home upon its sale.
The National Low Income Housing Coalition (NLIHC) reported that several witnesses at the hearing spoke about potential strategies for limiting the damaging effects of foreclosure:
Click here to read the NLIHC’s detailed description of the hearing.