"Many of Virginia 's working families are facing significant difficulty as mortgage rates adjust," Governor Kaine said. "I have formed the Virginia Foreclosure Task Force to bring mortgage industry representatives, housing consumer advocates, policy experts and researchers together to make recommendations that will minimize the impact that foreclosures will have on Virginians and our economy. My goal is to have policies in place that will help Virginians before they are faced with foreclosure."
The complete press release below the fold:
COMMONWEALTH OF VIRGINIA
Office of the GovernorTimothy M. Kaine FOR IMMEDIATE RELEASE
Governor November 15, 2007Internet: www.governor.virginia.gov www.vhda.com
GOVERNOR KAINE ANNOUNCES FORMATION OF
VIRGINIA FORECLOSURE PREVENTION TASK FORCE
~ Task force will protect and preserve homeownership for Virginia 's working families ~
ROANOKE - Governor Timothy M. Kaine today announced the formation of Virginia 's Foreclosure Prevention Task Force. The intent of the task force is to protect and preserve homeownership for Virginia's working families and communities in light of the current foreclosure trends.
"Many of Virginia 's working families are facing significant difficulty as mortgage rates adjust," Governor Kaine said. "I have formed the Virginia Foreclosure Task Force to bring mortgage industry representatives, housing consumer advocates, policy experts and researchers together to make recommendations that will minimize the impact that foreclosures will have on Virginians and our economy. My goal is to have policies in place that will help Virginians before they are faced with foreclosure."
While Virginia 's foreclosure rate is low relative to other states - nearly two thirds lower than the national rate of 1.4 percent - it has more than doubled from the first quarter of 2006. Foreclosures are concentrated among subprime loans, making this market niche the greatest concern. In the second quarter of 2007, 5,800 Virginia homes were in foreclosure, 4,000 of which involved subprime loans.
Other sectors of the mortgage industry have not suffered the same difficulties as the subprime market.
"The Virginia Housing Development Authority (VHDA) only offers fixed rate/prime loans, and thus VHDA's loans continue to perform well compared to national and state averages," said VHDA Executive Director Susan F. Dewey. "However, the Governor's Foreclosure Task Force will enable us to work with industry experts to ensure that the state is proactive in addressing potential problems resulting from aggressive lending practices offered by other lenders."
Data available indicate that many subprime adjustable rate mortgages have not yet reached the first adjustment period which typically triggers foreclosure, when families are not able to afford the higher interest rate. Therefore, analysts expect foreclosures to continue escalating. Governor Kaine is charging the Task Force with identifying ways to prevent the trauma of loss of home, related financial devastation, and family disruption. These individual dislocations have a correspondingly negative impact on communities as foreclosed homes depress property values and the real estate industry.
"Our concern is for the individuals and families who have struggled to find affordable housing, and who are now facing foreclosure as rates adjust," said Bill Shelton, Director of the Virginia Department of Housing and Community Development. "We anticipate that the Foreclosure Prevention Task Force will monitor the situation, and make recommendations on steps that can be taken to prevent foreclosures in Virginia ."
The task force will be chaired by Secretary of Commerce and Trade Patrick Gottschalk and will work to:
Collect and analyze data to assess foreclosures in Virginia and determine level of homeownership preservation needs.
Identify and review financial and programmatic resources available to homeowners to minimize the number of foreclosures.Recommend outreach, counseling and educational programs and activities that focus on foreclosure prevention and support to homeowners.
Review existing Virginia laws and regulations and recommend appropriate revisions, including legislative actions if needed.
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This morning, the Rev. Al Sharpton came down hard on Senate Democrats, particularly Presidential hopeful Chris Dodd. He blasted the failure of Senate Democrats to support their colleagues in the House in preventing the Bush Administration/HUD with their attempt to completely eliminate downpayment assistance programs.
Sharpton noted how downpayment assistance programs (DAPs) -- where nonprofits utilize private funds, with zero Federal money, to help qualified working families gain the 3% downpayment necessary for gaining a FHA insured home loan -- allowed more than 600,000 to people become homeowners in the past decade.
The GAO reports that if downpayment assistance is done away with, 30% of African-American homebuyers and potentially 20% of Latinos will be unable to utilize FHA insured loans. This is about realizing the American dream and breaking the chain of poverty. Eliminating downpayment assistance is just another way of forcing millions of minorities to continue renting on the apartment plantation. A study by the Milken Institute found that low-income homeowners who used DAPs gained an average of $19,000 in net wealth. Owning a home allows folks to build assets, create generational wealth, and ultimately strengthen families and revitalize communities because people can find the funds necessary to send their kids to college, set aside rainy day savings, etc.