More Progress, and Peril, on the Home Opportunity Front

Alan Jenkins

Earlier this month, the Senate Committee on Banking, Housing, and Urban Affairs released a discussion draft of legislation to overhaul the nation’s housing finance system. Early analysis indicates that, while the draft acknowledges the important role that the government has to play in ensuring access to safe and sustainable homeownership, it also has serious deficiencies. Among other concerns, it lacks provisions to ensure that the housing finance system is fair and nondiscriminatory. And changes proposed in the bill could disadvantage smaller and rural lenders that serve often-neglected communities.

As the field dissects and discusses the draft bill in detail, it’s a good time to take a closer look at America’s longer-term progress on home opportunity—the idea that everyone deserves fair access to housing they can afford, free of discrimination, and with the chance to one day successfully own a home. Toward that end, The Opportunity Agenda recently released Progress and Peril III – Taking Action, an assessment of concrete steps to end unnecessary foreclosures, restore communities, protect fair housing, and keep homeownership safe and accessible.

Taking Action reports on progress toward implementation of the Compact for Home Opportunity, a collection of innovative solutions developed by experts around the country that was launched in February of 2012. The assessment reviews developments from May 2013 to December 2013, as well as breaking events in early 2014. (Prior reports covered February through August of 2012 and September 2012 through May 2013).

This most recent report finds considerable forward progress on multiple elements of the Compact—primarily through federal administrative action and state and municipal efforts—alongside inaction and recalcitrance, particularly by Congress. The Executive Branch made progress in several areas, from new mortgage servicing rules by the Consumer Financial Protection Bureau to a proposed rule on Affirmatively Furthering Fair Housing by the U.S. Department of Housing and Urban Development.

Several states adopted or implemented land bank laws and utilized effective homelessness prevention strategies. A number of cities used eminent domain to purchase and refinance mortgages, and several are using vacant property registration and inclusionary zoning.

While Congress took almost no action during the period that we studied, the Senate’s confirmation of Mel Watt to oversee Fannie Mae and Freddie Mac, and the draft housing finance bill from the Senate, made the last few months eventful ones on Capitol Hill.

As the report’s full title suggests, the current policy landscape includes peril as well as progress. Congress again failed to take straightforward steps like allowing mortgage debt to be restructured in bankruptcy or making the Protecting Tenants at Foreclosure Act permanent. And efforts to restore communities devastated by predatory lending and foreclosures have been incomplete at best. The tremendous harm caused by years of abuses by lenders and inadequate consumer protections will not soon be repaired

But the affirmative steps that did occur have helped hundreds of thousands of families around the country, and have aided our economic recovery. They show that innovative solutions are not just possible, but working. They need to be expanded.

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