|
American Homeowners Grassroots Alliance
6776 Little Falls Road
Arlington VA 222213
www.AmericanHomeowners.org
Defending the interests of over 70 million American homeowners
To: All Members of the American Homeowners
Grassroots Alliance
Subject: Your Help Needed to Stop the New Mortgage Crisis!
Date: August 24, 2009
A new and extremely serious housing crisis
threatens the economy and the values of all American homes. That is the
prime mortgage crisis, which has now eclipsed the subprime mortgage
crisis. Prime mortgages account for the vast majority of all mortgages,
and the number of American homes financed by prime mortgages that are in
foreclosure or at risk of foreclosure has grown tenfold since the
beginning of 2007.
Foreclosures on prime mortgages are increasing
very rapidly because growing unemployment and underemployment is leaving
many more homeowners who had good credit histories unable to keep up
with their mortgages. At the beginning of 2007 only about 2% of prime
mortgages (fixed rate or adjustable) were in foreclosure or more than 90
days delinquent. At the end of the second quarter of this year, that
number was closing in on 20%. Although the total number of remaining
subprime mortgages has declined, the share that were in foreclosure or
more than 90 days delinquent, has grown from 8% to 27% over the same
period.
The growing affordability and recent growth in
sales of existing homes have not solved the problem. A significant
factor in the recent growth in home sales is the 10% first time home
buyers tax credit, which expires on December 1, 2009. It has brought
many new buyers into the market, absorbing many foreclosures and
enabling many move-up buyers to purchase their next home. The total
amount of time from the beginning of a search for a home through the
mortgage financing process and final settlement is normally more than
two months. This means that the stimulative effect of the first time
buyer’s tax credit will largely be over by the time Congress returns to
Washington D.C. next month.
Most economists say our economic recovery will be
mostly jobless when it begins. Sadly, that means there is little chance
that many of the homeowners who lost their jobs during the recession
will soon be able to find work and resume their mortgage payments.
Legislation must therefore be enacted soon to replace and enhance the
expiring first time home buyers tax credit, or the growing prime
mortgage crisis will almost certainly drag our nation into an even
deeper recession.
The best alternative to prevent that from
happening is for Congress to quickly pass the Home Buyer Tax Credit Act
of 2009 (S. 1230 and H.R.1245). This proposed
legislation will extend and expand
the expiring first time buyer’s tax credit. S. 1230 and H.R.1245 will
increase the 10% first time home buyer’s tax credit limit from $8,000 to
$15,000, and expand the credit’s eligibility to apply to any buyer. The
legislation would also eliminate the current $75,000/individual and
$150,000/couple income eligibility caps, and extend the tax credit for
one year from date of enactment.
In our August 24 letters to leaders of
the Senate and House Committees in charge of tax legislation, AHGA urged
Senators Max Baucus and Charles Grassley, and Representatives Charles
Rangel and Dave Camp, to make the passage of this legislation their
highest priority in this Congress. All four of them need to hear both
from their own constituents and other legislators who support those
bills as well. For that reason, we urge you to contact both of your U.S.
Senators and your U.S.
Representative
and urge them to do two things:
● Cosponsor the Home Buyer Tax Credit Act of 2009 (S. 1230 in
the Senate and H.R.1245 in the House
and
● Ask the leaders of their tax-writing committees to hold
hearings on the respective bills and mark them up as soon as
they return from the August recess.
You can easily contact your Senators and
your Representative through the Congressional look-up tool on the home
page of our website (go to
www.AmericanHomeowners.org
). You can use the
content in this alert or the similar content in our letter to the
committee leaders (below) to customize your own message.
Because of the impending serious threat
of the prime mortgage crisis, we cannot afford to wait until the new prime
mortgage crisis deals another serious blow to the economy while we are still in
the middle of a deep recession. In your own interest, and the interest
of your fellow homeowners, we urge you to respond today. Please feel
free to share this legislative alert with your friends and family.
The American Homeowners Grassroots Alliance is a
national consumer advocacy organization dedicated to helping more than
70 million American homeowners better understand the major economic
issues affecting their home and their lifestyle, and empowering them to
make their voices heard by government officials. More about AHGA is at
www.AmericanHomeowners.org.
Our letter to the Chairman and Ranking Minority Member of the Senate
Finance and House Ways and Means Committees:
American Homeowners Grassroots
Alliance
6776 Little Falls Road
Arlington VA 222213
www.AmericanHomeowners.org
Defending the interests of over 70 million American
homeowners
August 24, 2009
Senators Max Baucus and Charles Grassley
Representatives Charles Rangel and Dave Camp
By fax
Dear Senators Baucus and Grassley, and
Representatives Rangel and Camp:
On behalf of the over 70 million American
homeowners, we urge you to hold hearings and mark up the
Home Buyer Tax
Credit Act of 2009 (S. 1230 and H.R.1245) upon your return from the
August recess. The nation’s deep recession was created by the subprime
mortgage crisis. Unless Congress takes action, we believe the recession
will be extended and likely worsened by the recent dramatic growth in
prime mortgage foreclosures.
Foreclosures on prime mortgages (the vast majority
of all mortgages) are increasing very rapidly as growing unemployment
and underemployment is leaving more homeowners with good credit
histories unable to keep up with their mortgages. At the beginning of
2007 only about 2% of prime mortgages (fixed rate or adjustable) were in
foreclosure or more than 90 days delinquent. At the end of the second
quarter of this year that number was closing in on 20%. Although the
total number of remaining subprime mortgages has declined, the share
that were in foreclosure or more than 90 days delinquent has grown from
8% to 27% over the same period.
The growing affordability and recent increased
sales of existing homes have not solved the problem. A significant
factor in the recent growth in home sales is the 10% first time home
buyers tax credit, which expires on December 1, 2009. The total amount
of time from the beginning of a search for a home through the mortgage
financing process and final settlement is normally more than two months.
This means that the stimulative effect of the first time buyer’s tax
credit will largely be over by the time Congress returns to Washington
D.C. next month.
Most economists agree that we will have a mostly
jobless recovery when our economic recovery begins. That means there is
little chance that most of the homeowners who lost their jobs during the
recession will be able to find work and resume their mortgage payments.
Legislation must be enacted to replace and enhance the expiring first
time home buyers tax credit, or the prime mortgage crisis will almost
certainly drag our nation into an even deeper recession.
The best alternative to avoid that likelihood is
for Congress to quickly pass S. 1230 and H.R.1245. These bills will i ncrease
the 10% first time home buyer’s tax credit limit from $8,000 to $15,000
and expand the credit’s eligibility to apply to any buyer. The
legislation would also eliminate the current $75,000/individual and
$150,000/couple income eligibility caps, and extend the tax credit for
one year from date of enactment.
Because of the threat to our economy we urge the
Senate Finance and House Ways & Means Committees to make the passage of
this legislation their highest priority in this Congress.
Sincerely,
Bruce N Hahn, President
Bruce Hahn
President
American Homeowners Grassroots Alliance and
the American Homeowners Foundation
Serving the interests of the nation's 75 million
homeowners and future homeowners since 1984.
The American Homeowners Grassroots Alliance is a nonpartisan consumer
advocacy organization dedicated to assisting the nation's 75
million homeowners understand significant policy issues
affecting homeowners and homeownership, and empowering homeowners
to make their voices heard by state and federal officials.
The American Homeowners Foundation is an educational and research
foundation providing information and tools to help consumers make wiser
decisions when they buy, sell, remodel, finance or invest in homes.
Visit our web site
http://www.americanhomeowners.org.
Contact us at: 6776 Little Falls Road, Arlington, VA 22213-1213.
Cell: 571-214-1013; Headquarters: 703-536-7776
|