U.S. Senators Olympia J. Snowe and Susan Collins (R-Maine) sent a letter Monday urging Department of Housing and Urban Development (HUD) Secretary Steven Preston to help homeowners facing foreclosure by providing flexibility when defining the term “foreclosed home” and allowing state and local officials to weatherize properties facing foreclosure.
“For many in our home state, the housing market crisis has been compounded by factors unique to Maine, such as an extended foreclosure process and exorbitant home heating prices,” Senators Snowe and Collins said. “By defining ‘foreclosed home’ as any property in the foreclosure process, HUD can help Mainers get a head-start on stabilizing their communities and preparing for the approaching winter.”
As HUD establishes the rules that will guide the “Emergency Assistance for the Redevelopment of Abandoned and Foreclosed Homes” section of H.R. 3221, the Housing and Economic Recovery Act, Senators Snowe and Collins request for the term “foreclosed home” to include properties that are in any stage of the foreclosure process. In states like Maine where the foreclosure process may last a year or longer, this flexible definition will allow state officials to access Community Development Block Grant (CDBG) funds and assist affected communities in a timely manner. Senators Snowe and Collins also cited that by allowing state and local officials to use CBDG funds to weatherize properties facing foreclosure, homeowners will have a better chance to meet rapidly rising energy costs.
The text of the letter is below.
Mr. Steven Preston
Secretary
Department of Housing and Urban Development
451 7th Street NW
Washington, DC 20410
Dear Secretary Preston:
As the Department of Housing and Urban Development moves forward in establishing the rules and guidelines that will govern the “Emergency Assistance for the Redevelopment of Abandoned and Foreclosed Homes” section of H.R. 3221, the Housing and Economic Recovery Act of 2008, we urge you to provide flexibility within the rules to afford states the maximum ability to address the many challenges caused by foreclosures.
Included in the Housing and Economic Recovery Act are provisions providing $3.92 billion in supplemental Community Development Block Grant (CDBG) Funds. These funds are designed to give state and local officials the financial tools necessary to assist the communities hardest hit by foreclosures and delinquencies, and to ensure that communities can mitigate the harmful effects of foreclosures. As the Department of Housing and Urban Development establishes the parameters for usage of these funds, we request that you define the term “foreclosed home” to include properties that are at any stage in the foreclosure process. With a foreclosure process in states like Maine that may take a year or longer, we believe that allowing state and local officials access to these CDBG funds at any time during the foreclosure process will be most helpful in addressing the foreclosure crisis and stabilizing communities.
Specifically, we believe that by allowing state and local officials to weatherize properties facing foreclosure, homeowners will have a better chance to meet rapidly rising energy costs. As a cold-weather state, Maine is facing exorbitant heating oil prices this winter, which compounds the difficulties of families facing foreclosure. According to the National Association for State Community Services Programs, the first year energy savings for households weatherized in 2008 will be more than $413.
As you move forward in establishing the guidelines for the use of supplemental CDBG funds as provided in the Housing and Economic Recovery Act of 2008, we again urge you to define the term “foreclosed home” to include properties that are at any stage in the foreclosure process. This will allow states such as Maine to take the necessary steps to address the foreclosure crisis, keep families in their homes, reduce energy demand, and help stabilize communities.
Thank you for your consideration of this important request. We look forward to your positive response.
Sincerely,