Donnelly bill seeks to help same homeowners remain in their homes
Washington, D.C. – July 15, 2009 – (RealEstateRama) — Today, Congressman Joe Donnelly learned that the Obama Administration is considering a plan that would allow homeowners facing foreclosure to avoid eviction by giving them the option of renting their homes instead. In May, Donnelly introduced The Neighborhood Preservation Act along with Congressman Gary Miller (R-CA), which would, like the plan said to be under consideration by the Obama Administration, allow banks to lease a foreclosed home to its distressed owner.
According to a July 14th Reuters article, “Under one idea being discussed by the Obama Administration, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years.”
“I was pleased to learn that the Obama Administration is considering a plan similar to the one outlined in the bill I introduced,” Donnelly said. “By allowing homeowners facing foreclosure to rent their homes rather than face eviction, we are giving folks a second chance to get back on their feet in this tough economic climate while also minimizing the negative impact on surrounding homes in the neighborhood. I hope my legislation is passed by the House very soon.”
H.R. 2529, The Neighborhood Preservation Act, would allow a bank to rent a foreclosed property to the previous owner as an alternative to eviction. Under the bill, the distressed homeowner would have the option to lease the property with the opportunity to buy back his home. This legislation would also enable the lender to wait to resell the property until the market is more stable, and thereby potentially recover all or part of the loss that would otherwise have been incurred due to immediate sale in the currently saturated market.
This concept was highlighted in the most recent version of The Atlantic as one of the 15 ideas for “fixing the world.”
“The biggest impact of this whole foreclosure crisis has been on communities and neighborhoods,” Said Judy Fox, associate clinical professor of law at Notre Dame who helps run the Legal Aid Clinic at Notre Dame. “Coming up with creative solutions to allow people to stay in their homes instead of the homes being abandoned—even if it is just a temporary fix—is better for everyone involved. Congressman Donnelly’s bill and President Obama’s suggested plan would provide so many of my clients with a great alternative to abandoning their homes.”
Contact: Samantha Slater