By Eugene T. Lowe
May 19, 2008

During the first week of May, Conference of Mayors President Trenton (NJ) Mayor Douglas H. Palmer addressed two groups on the effects of the mortgage foreclosure crisis on cities. On May 1, Palmer delivered a speech at New York University’s Furman Center for Real Estate and Urban Policy attended by leading housing researchers, policymakers, lenders, and nonprofit organizations. His remarks were presented during a dinner opening a one-day session on “Transforming Foreclosed Properties into Community Assets.” Several days later, May 7, Palmer participated in a panel discussion sponsored by NeighborWorks America in Cincinnati. The panel discussion was part of a national symposium on achieving neighborhood stabilization following mortgage foreclosures. The theme of the meeting, attended by more than 600 foreclosure counselors, was “Weathering the Storm: Stabilizing Communities in the Wake of Foreclosure.”

In his remarks to both groups, Palmer described the Conference of Mayors’ activities regarding the mortgage foreclosure crisis, including the policies that mayors have called for to address the issue. At the USCM Winter Meeting last January, mayors asked Congress for the following: 1) increase mortgage revenue bonds by $10 billion for re-financings; 2) provide emergency Community Development Block Grant (CDBG) funds to buy vacant and foreclosed properties; 3) reform the Federal Housing Administration to help more homeowners in trouble; 4) increase the loan limits for Freddie Mac and Fannie Mae; and 5) reform the bankruptcy law to provide judges the authority to modify mortgages. With the exception of reforming the bankruptcy law, legislation is moving in both the House and Senate on each of the requests called for by the mayors.

Both groups were concerned with neighborhood stabilization. In the Senate, H.R. 3221, Palmer said to both groups that CDBG funds (referred to as a neighborhood stabilization fund) “…would make it possible for localities to buy foreclosed properties and then sell or rent them. The $3.92 billion program is exactly what mayors have called for.” Similarly, the House bill, H.R. 5818, the Neighborhood Stabilization Act of 2008, would provide $15 billion ($7.5 billion for loans and $7.5 billion for grants) for the purchase and rehabilitation of vacant and foreclosed homes. Palmer said, “This Senate and House legislation will provide state and local governments, non-profits, housing and community development agencies and groups with resources needed to help stabilize communities experiencing mortgage foreclosures.”