This morning, the Rev. Al Sharpton came down hard on Senate Democrats, particularly Presidential hopeful Chris Dodd. He blasted the failure of Senate Democrats to support their colleagues in the House in preventing the Bush Administration/HUD with their attempt to completely eliminate downpayment assistance programs.
Sharpton noted how downpayment assistance programs (DAPs) — where nonprofits utilize private funds, with zero Federal money, to help qualified working families gain the 3% downpayment necessary for gaining a FHA insured home loan — allowed more than 600,000 to people become homeowners in the past decade.
The GAO reports that if downpayment assistance is done away with, 30% of African-American homebuyers and potentially 20% of Latinos will be unable to utilize FHA insured loans. This is about realizing the American dream and breaking the chain of poverty. Eliminating downpayment assistance is just another way of forcing millions of minorities to continue renting on the apartment plantation. A study by the Milken Institute found that low-income homeowners who used DAPs gained an average of $19,000 in net wealth. Owning a home allows folks to build assets, create generational wealth, and ultimately strengthen families and revitalize communities because people can find the funds necessary to send their kids to college, set aside rainy day savings, etc.
HUD has been trying to get rid of this program, erroneously accusing DAPs of inflating default rates. They also have the salient agenda of completely undermining the New Deal program of the entire Federal Housing Administration. Research by the third party expert Experian shows that many of the largest and most credible DAPs have default rates lower than those of the FHA portfolio.
What is most dangerous is the fact that without DAPs, the poorest among us will be even more vulnerable to predatory loaning such as subprime loans.
Fortunately, Maxine Waters, Barney Frank, and others in the House have ensured the passage of a provision their chamber to prevent HUD from implementing the rule. However, in the Senate, Dodd, who is Chair of the Banking Committee and who has ultimate authority over this issue, is joining Senate Republicans to side with HUD in destroying DAPs.
Where is the Democratic leadership here? How can they demand that Blacks and other working class families give them their vote — while they work quietly with Republicans to push the American Dream even further out of reach for so many minorities.
I’m glad Sharpton took a stand this morning. Let’s demand Senator Obama, Senator Clinton and Senator Dodd show real leadership and stop posturing to our community. They can’t expect the Black vote while pushing the Black housing issues to the curb.
Black Bloggers The Field Negro and Jack&Jill Politics have taken leadership in shedding light on this issue. What about the rest of the ‘progressive’ blogosphere?
Being from CT, Dodd’s relationship with the insurance and banking industry has always seemed to me too close for comfort. I guess he can’t vote to take business away from private lenders, because he knows where his bread is buttered. Yet another argument for campaign finance reform.
I’d like to set the record straight on Senator Dodd’s position on down payment assistance.
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First, your attacks have been targeted at Senator Dodd and have painted him as siding with Bush. That’s just not true. The FHA Modernization Act passed out of the Banking Committee 20-1, with all Democrats supporting it – a good indication that that Dodd is not supporting the President but rather leading on an issue important to every segment of society and critical to ensure that people are able to find affordable housing and achieve the dream of homeownership.
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The Center for American Progress, hardly a pro-Bush bastion, praises the legislation.
Second, I think you’re misrepresenting what these programs do. A recent Washington Post article noted that these programs often make housing costs significantly higher. “Such programs allow home sellers to give money to charities, which in turn assist buyers with their down payments. The sellers pay the charities a service fee, but often recoup the money by charging a higher price for the homes, usually 2 or 3 percent more, or an amount equal to the down payment, according to a 2005 study by the Government Accountability Office.”
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But most important is what Chris Dodd will do as President. He’s for expanding homeownership for all Americans and has a plan to make it easier for people to get down payment assistance without endangering them financially.
You can read his full homeownership plan here: http://chrisdodd.com/issues/homeownership/
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Lastly, as you’ve copied and pasted an identical diary about two dozen times at different progressive community sites, I’m posting this response in multiple locations to ensure everyone can see Dodd’s side of the story, complete with links and sourcing.
…the self-described Center for American Progress says, but just note the following
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The Federal Housing Administration Modernization Act of 2007 would give the FHA more flexibility to insure mortgages for higher-risk borrowers and step up its role in solving the mortgage meltdown.
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what you are suggesting is that the CAP wants to socialize (a/k/a “subsidize”) high risk borrowing. We have seen what that has led to in the last couple of years in the high risk (so-called “sub-prime”) mortgage market. Which is threatening to bring down the international banking system
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CAP is, yet again, totally insane.