Press Release

Casey, Leahy, Specter, Gillibrand Applaud Passage of Their Amendment to Give States More Flexibility to Allocate Funds under Neighborhood Stabilization Program

May 6, 2009

Washington, D.C.
U.S. Senators Bob Casey (D-PA), Patrick Leahy (D-VT), Arlen Specter (D-PA) and
Kirsten Gillibrand (D-NY) today applauded the passage of the amendment they
introduced to provide state and local governments with more flexibility in
using funds allocated by the Department of Housing and Urban Development (HUD)
under the Neighborhood Stabilization Program (NSP).

“A disturbing
byproduct of the increased rates of foreclosures is that entire communities are
being affected and local economies are being dragged down,” said Senator
Casey.  “We have to get these neighborhoods stabilized efficiently and
quickly and we must give the states the flexibility to allocate the funds so
that more families and communities don’t suffer.”

“Addressing the
housing crisis is a vital step in moving the country toward economic
recovery.  This amendment will give states tools they need to rehabilitate
or redevelop homes in order to stabilize neighborhoods.  That will help
communities in Vermont and around the country address the issues brought on by
increased foreclosures,” said Senator Leahy.

“Halting the
wave of foreclosures is critical to sparking an economic recovery,” Senator
Specter said.  “This amendment includes key provisions of a bill I
introduced last year to ensure that more attention, counseling and resources
are directed toward preventing foreclosures, stabilizing the housing market and
getting the economy back on track.”

“During these
tough economic times, we need to help our communities prevent foreclosure,”
said Senator Gillibrand. “This amendment will give communities the
resource needed to provide counseling and foreclosure prevention programs that
will keep families in their homes. Communities need these tools and resources
to help promote economic growth in New York and throughout the country.”

amendment will give much needed assistance to cities like Philadelphia that are
working to prevent foreclosures before they occur,” said Philadelphia
Mayor Michael Nutter.  “Through the Philadelphia Mortgage
Foreclosure Prevention Program we have reached out to families who are at risk
of foreclosure and worked with them to help them stay in their homes.  We
have had great success, saving over 800 homes since last year, but additional
investment would provide a great boost to our efforts.”

In July 2008,
Congress passed and President Bush signed into law the Housing and Economic
Recovery Act (HERA).  The Neighborhood
Stabilization Program was included as part of that bill to provide emergency
assistance to state and local governments to acquire and redevelop foreclosed
properties that might otherwise become sources of abandonment and blight within
their communities. The Neighborhood Stabilization Program (NSP) provides grants
to every state and certain local communities to purchase foreclosed or
abandoned homes and to rehabilitate, resell, or redevelop these homes in order
to stabilize neighborhoods and stem the decline of house values of neighboring

Title III of
HERA allocated $4 billion in emergency assistance to state and local
governments to use for the rehabilitation of abandoned and foreclosed
properties in their jurisdictions.  These funds were crucial to assist
states and municipalities in acquiring and redeveloping abandoned and
foreclosed properties that caused neighborhood blight, increased crime and lost
tax revenue.

the American Recovery and Reinvestment Act, Congress again recognized the value
of the Neighborhood Stabilization Program Grants, or NSP Grants, by providing
another $2 billion, this time in a competitive grant program.

lending and the subprime mortgage crisis created a wave of foreclosures that
has swept the country now since late 2006.  Many communities fear a second
wave that will result from the severe loss of jobs in the economic downturn and
the loss of value in homes.  Borrowers unable to make their monthly
payments due to unemployment will not be able to refinance their homes, because
they have plummeted in value as a result of the housing market meltdown. 
This amendment would offer more flexibility to grantees to use funds for this
purpose.  It would also allow states receiving the minimum allocation
under NSP to use the funds to address statewide concerns.