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Update:
View the full 2009 "Foreclosure to Homelessness" Report here

Special Alert!

National Survey Finds Foreclosures Adding to Homeless Crisis
Press Conference Friday, June 26 at 9:30 am ET

Foreclosure and Homelessness Prevention

RECOMMENDATIONS

Assure the federal response to the national mortgage foreclosure crisis includes actions to prevent homelessness among owners and tenants losing their homes.

U.S. Representatives – Support the inclusion of funds for homelessness prevention and rapid re-housing in any economic stimulus or foreclosure-related legislation. Co-sponsor the Protecting Tenants at Foreclosure Act of 2009 (H.R. 1247).

U.S. SenatorsSupport the inclusion of funds for homelessness prevention and rapid re-housing in any economic stimulus or foreclosure-related legislation. Introduce or co-sponsor a companion bill to the Protecting Tenants at Foreclosure Act of 2009 (H.R. 1247).

ISSUE STATUS

The American Recovery and Reinvestment Act of 2009 created a $1.5 billion Homelessness Prevention and Rapid Re-Housing Program (HPRP) to help families who are either homeless or at risk of becoming homeless to pay rent, make security deposits, pay utility bills, and cover other housing expenses. A Notice for HPRP was issued by HUD on March 19, 2009, viewable at http://www.hudhre.info/documents/HPRP_Notice_3-19-09.pdf.

Representative Keith Ellison (D-MN) reintroduced the Protecting Tenants at Foreclosure Act (H.R. 1247) in March 2009. The bill was referred to the House Financial Services Committee.

WHY THIS MATTERS

  • Mortgage foreclosures are becoming ever more frequent across the United States.
  • Low-income and extremely low-income households are the most heavily impacted by mortgage foreclosures.
  • In December 2008, an annual survey from the U.S. Conference of Mayors found that 12 major cities reported an increase in homelessness as a result of foreclosure, with renters of foreclosed properties being the victims most vulnerable to homelessness.
  • While data are incomplete, CBS News reported on March 27, 2008 that based on Realty-Trac data, “38 percent of foreclosures now involve rental properties,” affecting “at least 168,000 households nationwide.” In some areas as many as half the foreclosed units are occupied by tenants.
  • Renters often have no idea their home is about to be foreclosed.  Depending on state law, renters in foreclosed properties may be evicted with limited notice, forcing families to move quickly and increasing the number of vacant properties in neighborhoods. 
  • Many households are finding that the economic recession and rise in food and gas prices have caused their income to be diverted more and more to basic needs, preventing them from establishing reserves for emergency situations, such as a sudden loss of housing.
  • Congress is proposing extraordinary measures to refinance troubled borrowers and provide resources to state and local communities to tackle abandoned and foreclosed properties. These efforts are important and needed. However, alone they are insufficient to protect families and neighborhoods because they do not address the needs of renters in properties subject to foreclosure or to put in place robust homelessness prevention provisions.

BACKGROUND

The economic recession and continuing foreclosure crisis are threatening swell the number of low-income families and individuals seeking homeless assistance services. With the unemployment rate on the rise and health care costs skyrocketing, many households are forced to make difficult decisions between basic life necessities, like housing, health care, and food. Additionally, many of the nation’s most innocent yet forgotten victims of the foreclosure crisis are low-income renters whose homes are foreclosed upon. A recent survey from the U.S. Conference of Mayors found that 12 major cities reported a definite increase in homelessness as a result of foreclosure, with renters being the victims most vulnerable to homelessness.

As an emergency measure, the American Recovery and Reinvestment Act of 2009 created a $1.5 billion Homelessness Prevention and Rapid Re-Housing Program (HPRP) to help families who are either homeless or at risk of becoming homeless to pay rent, make security deposits, pay utility bills, and cover other housing expenses. It also provides funds to help these families receive appropriate services related to housing search and retention. Funds through this program will be distributed through the formula currently in use by the Emergency Shelter Grants (ESG) program, and 75 percent of these funds must be expended in the first two years. This infusion of emergency funds will go a long way in temporarily preventing a sharp increase in homelessness due to the economic recession. In order to respond to the additional, long-standing emergency shelter and re-housing needs of the millions of Americans experiencing homelessness, Congress should provide a significant funding increase in the FY2010 regular appropriation to the HUD McKinney-Vento homeless assistance programs.

The Protecting Tenants at Foreclosure Act (H.R. 1247) would protect the tenancy rights of renters occupying housing units undergoing foreclosure. The bill, similar to the version he introduced in the last session of Congress, would protect renters living in foreclosed properties by requiring the purchasers of said properties to give the tenants 90 days notes prior to eviction. The bill also provides that tenants with Housing Choice Vouchers may remain in place for the entire term of the lease. NCH and others are supportive of Rep. Ellison’s efforts, and urges Congress to pass this crucial legislation to help keep innocent victims of the foreclosure crisis in their homes.

The National Coalition for the Homeless released a report in April 2008 that forecasts an increase in homelessness due to the foreclosure crisis. The report, Foreclosure to Homelessness: the Forgotten Victims of the Subprime Crisis, summarizes the findings of a national survey of state and local homeless coalitions conducted in winter 2008 to ascertain whether their communities were seeing an increase in homelessness due to the foreclosure crisis. To read the full report, visit: www.nationalhomeless.org. A follow-up report is scheduled to be released in June 2009.


For further information on the public policy recommendations of the National Coalition for the Homeless, contact the NCH public policy staff at info@nationalhomeless.org or 202.462.4822, or visit www.nationalhomeless.org.

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