President Bush Outlines Aid For Mortgage Holders

Bush outlines aid for mortgage holders

By DEB RIECHMANN, Associated Press Writer

President Bush on Friday outlined ways to help homeowners facing foreclosure — the administration's first effort to deal with an expected wave of defaults fueled by the mortgage crisis.
The initiatives, which are not aimed at bailing out lenders or speculators, are designed to help homeowners with risky mortgages keep their houses. In remarks in the Rose Garden, Bush also discussed efforts to keep the problems from arising in the future.
"The government's got a role to play, but it is limited," Bush said. "A federal bailout of lenders would only encourage a recurrence of the problem."
The president insisted that the U.S. economy was strong and could weather recent turbulence in the financial markets. He said the mortgage market, especially the subprime sector, has shown particular strain. One of the most troubling developments has been an increase in adjustable-rate mortgages, which start out with low interest rates, then reset to higher rates after a few years.
"This has led some homeowners to take out loans larger than they could afford based on overly optimistic assumptions about the future performance of the housing market," Bush said. "Others may have been confused by the terms of their loan, or misled by irresponsible lenders. Whatever the reason they chose this kind of mortgage, some borrowers are now unable to make their monthly payments, or facing foreclosure."
A key element of Bush's plan would allow homeowners with good credit histories, but who cannot afford their mortgage payments, to refinance into mortgages insured by the Federal Housing Administration to keep from defaulting.
Earlier this month, Bush predicted that the ongoing decline in the housing market wouldn't become precipitous, but would result in a "soft landing."
He rejected any direct government aid to homeowners losing their houses to foreclosures, saying he only supported federal government help that would encourage refinancing and educate prospective home buyers about risky mortgage terms
"Anybody who loses their home is somebody with whom we must show enormous empathy," the president said at an Aug. 9 news conference. "The word `bailout,' I'm not exactly sure what you mean. If you mean direct grants to homeowners, the answer would be no, I don't support that."
On Friday, Bush:
• Urged Congress to pass legislation that would give the Federal Housing Administration more flexibility to help mortgage holders with subprime mortgages.
• Pledged to work with Congress to reform the tax code to help troubled borrowers rework their loans.
• Called for rigorously enforcing predatory lending laws and strengthening lending practices.
Foreclosure and late payments have spiked, especially for so-called subprime borrowers with blemished credit histories or low incomes. Higher interest rates and weak home values have made it impossible for some to pay or to keep up with their monthly mortgage payments. Some overstretched homeowners can't afford to refinance or even sell their homes.
Mortgage foreclosures and late payments are expected to worsen. Some 2 million adjustable rate mortgages are to reset to higher rates this year and next. Steep penalties for prepaying mortgages have added to some homeowners' headaches.
The economy enjoyed a strong revival in the spring although growing troubles in housing and credit markets have darkened prospects considerably since then. The Commerce Department reported Thursday that the gross domestic product grew at an annual rate of 4 percent in the second quarter — the strongest showing in more than a year.
But that growth could be the best showing for some time as the economy continues to be battered by the worst housing slump in 16 years and a widening credit crisis that has sent financial markets on a roller-coaster ride in recent weeks.

RANWC Govt Affairs in the News

from the Daily Herald

Realtors oppose teardown fee plan
By Ames Boykin Daily Herald Staff
Published: 8/27/2007 6:01 AM

Word that Rolling Meadows may impose a fee of as much as $5,000 on teardowns has prompted a group representing Northwest suburban real estate agents to prepare to fight what it dubs a "teardown tax."
City officials next month plan to discuss imposing a $1,500 fee for homes that are completely demolished to make way for larger homes. Leaders say replacing the city's post-World War II homes can change the character of the neighborhood.
A city committee looking at maintaining affordable housing in Rolling Meadows has suggested increasing the proposed fee to $5,000.
Jeff Metzger, government affairs director for the Realtor Association of Northwest Chicagoland, said the fee amounts to a tax. He questions how setting a fee would encourage affordable housing.
"We think property owners should have the right to do whatever they want with their property," Metzger said.
A person who razes a home to build a new one might not necessarily be building a larger one, he added.
Metzger said a newer home that sells for more on the market also improves the community and adds property taxes to the city's coffers.
City officials pushing for the fee, which will be formally discussed by aldermen next month, disagree.
"The increase in property values is precisely the phenomenon that keeps middle-class professionals and young families from being able to buy a home," said a report from the city's affordable housing committee.

Rolling Meadows Affordable Housing

For the past year we have been monitoring an Affordable Housing Ad Hoc committee in Rolling Meadows. Last night they made their recommendations public. We are opposed to a few recommendations within the report. The first being a proposed $5000 fee for a teardown. The second would be mandatory set asides for new developments. I am working with the City in hopes of defeating this proposal. If you live, sell or work in Rolling Meadows and would like to be involved in this process please contact me directly.

Please find below an article from the Daily Herald on this issue. Please note: the Daily Herald writes that the city already charges a $1500 tear down fee. That is not correct. Currently NO fee is charged by Rolling Meadows on a tear down. They are proposing a $5000 fee.

By Ames Boykin
rboykin@dailyherald.com
Posted Wednesday, August 22, 2007

Rolling Meadows is taking steps to ensure its post-World War II community stays affordable for families.
A committee formed to look at maintaining the state rules to keep towns at least 10 percent affordable returned recommendations Tuesday, including one to triple a fee for teardowns. The committee wants the city to commit to keeping its community at least 20 percent affordable.
In Rolling Meadows, 23 percent of the housing is affordable. According to the state, affordable applies to apartments renting for $775 or less, and homes or condos selling for less than $126,000.
Builders currently are charged $1,500 for teardowns, but a proposed change would increase it to $5,000. City council members will discuss the increase more next month.
When someone takes a more affordable home and replaces it with a more expensive one, 4th Ward Alderman Tom Rooney said it makes an impact. Rooney chaired the committee looking at affordable housing proposals.
Other recommendations include forcing new housing developments to include a minimum number of affordable units, and allowing more units for developments that exceed affordable housing requirements.
Aldermen will be discussing the proposals in the upcoming months to adopt an affordable housing plan in time for the new year.
Mayor Ken Nelson asked why the committee looked at maintaining a higher standard of affordable housing than the state’s 10 percent.
“This has always been a place where folks can come when they’re just starting out,” Rooney said.
All extra money from the city’s real estate transfer tax would be used for affordable housing policies, under the proposal.
Developers who would like to increase the number of units in their projects would get incentives under the plan. Should a developer build a 100-unit complex with 22 affordable units to make it 22 percent affordable, the city would let the complex build 11 more units, officials said.
While this would decrease the project’s affordable units, it would meet the city’s goal to keep 20 percent of units affordable.

Congresswoman Bean to Visit RANWC

• I am very pleased to announce that Congresswoman Melissa Bean has accepted my invitation to participate in the 10th annual RANWC Affiliate/Vendor Open House on September 14th!!! More details will follow.

Springfield Update

“Don’t interfere with anything in the Constitution. That must be maintained, for it is the only safeguard of our liberties.”
-Abraham Lincoln-

- This edition of Week in Review has been released on Thursday, August 16, 2007 since the Senate adjourned early Wednesday and the House did not convene this week in Springfield.

- As noted in last week’s issue the General Assembly finally approved a full-year State budget last week agreed to by the four leaders and sent House Bill 3866 to the Governor for his consideration. You will recall that the votes on this budget bill were OVERWHELMINGLY in support- the Senate vote was 52-5 in favor and the House vote was 99-8 in favor. Immediately there was a great deal of speculation as to what action the Governor would take on the budget bill, particularly since he had NOT taken any action on a supplemental appropriation bill that he had on his desk for nearly two months nor on the electric rate regulation legislation. Late on Monday night (nearly midnight) the Governor signed the supplemental appropriation bill and then on Tuesday, he made the surprising announcement that it was his intention to use his “executive authority” to move hundreds of millions of dollars from line items appropriated by the legislature in the full year budget to fund his plan to expand health care coverage in Illinois to cover an additional 717,000 people. The Governor defended this rearrangement of funds saying “it’s as legal as it gets, it’s as constitutional as it gets”.

- Other elected officials, political pundits and news media across the State though questioned whether the Governor had overstepped his authority. While the Governor is directed by our Constitution to prepare and submit a budget for the fiscal year the act of appropriating funds is a function of the legislative body. Article VIII of the Illinois Constitution deals with the issue of finance. Section 2 (b) of Article VIII, specifically states “The General Assembly by law shall make appropriations for all expenditures of public funds by the State. Appropriations for a fiscal year shall not exceed funds estimated by the General Assembly to be available during that year.”

- At the time of the publication of this newsletter, the Governor had not yet officially acted upon House Bill 3866, beyond issuing a press release of his intentions. To be clear, the constitutional question is not whether the Governor can reduce or eliminate items in the budget but it is whether the Governor can create new spending authority for expansion of access to healthcare. Again, according to Article IV, Section 9 of the Illinois Constitution, the Governor is permitted to “reduce or veto any item of appropriations in a bill presented to him. Portions of a bill not reduced or vetoed shall become law. An item vetoed shall be returned to the house in which it originated and may become law in the same manner as a vetoed bill. An item reduced in amount shall be returned to the house in which it originated and may be restored to its original amount in the same manner as a vetoed bill except that the required record vote shall be a majority of the members elected to each house. If a reduced item is not so restored, it shall become law in the reduced amount”. Senate President Emil Jones indicated he would NOT pursue an override should the Governor make these changes. However, the Speaker of the House, Michael Madigan, said he would proceed on the override. So even if the House of Representatives (which will act first on the override motions since the legislation began in the House) votes to override the Governor and restore the line items if the Senate does NOT act in a similar fashion the reductions/item vetoes would stand. A challenge would then have to be made to the new spending authority.

- The following is a link to the August 14, 2007 press release from the Governor:
http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=2&RecNum=6146

- Since the House was not in session this week no action occurred on Senate Bill 572, the mass transit proposal. This legislation includes the provision to permit the Chicago city council, within 6 months after the effective date of the legislation, to adopt an ordinance to increase their existing real estate transfer tax (currently $7.50 per $1,000 paid by the buyer) by up to $3 per $1,000 OR alternatively, impose a new supplemental tax up to $3 per $1,000 on the buyer or seller or both. Either option contained in SB 572 would be allowed WITHOUT the required approval by the voters in a referendum which is now State law. The legislation further specifies that the sole purpose of this increased/supplemental tax is to provide financial assistance to the CTA for retiree benefits. The IAR continues to actively OPPOSE this legislation.

- In other news, on Monday the Governor signed into law an IAR legislative initiative. House Bill 1637, sponsored by Representative Don Moffitt and Senator David Koehler, amends a section within the Illinois Property Tax Code regarding residential developments. Under the provisions of CURRENT law in all counties outside of Cook, when vacant land or farmland in excess of 10 acres is platted and subdivided into separate lots for development, the assessed valuation of all or part of the property is not changed from the vacant or farmland assessment level until a habitable structure is built on any lot of subdivided property, or when any lot (alone or in conjunction with contiguous property) is used for any business, commercial or residential purpose, or upon the initial sale of any platted lot- including a platted lot that is vacant. The assessed valuation of the remaining property, when next determined is reduced proportionately to reflect the exclusion of the property that no longer qualifies for valuation under this section of the Property Tax Code. This new law (Public Act 95-135) lowers the acreage to in excess of 5 acres in recognition that developments, particularly downstate, are often smaller. The new law takes effect January 1, 2008.

- House Bill 759 (Public Act 95-129) creating the Condominium Advisory Council Act was also signed into law on Monday, August 13th. The legislation provides that the Council will be composed of 7 members, 4 appointed by the legislative leaders and 3 appointed by the Governor to (1) identify issues facing condominium owners, condominium associations, and other persons who have financial interests in condominiums; (2) study the Condominium Property Act and related Acts that affect condominium ownership and suggest legislation to the General Assembly to amend those Acts; and (3) report its findings and recommendations to the Governor and General Assembly by January 31, 2008. This new law, sponsored by Representative Harry Osterman and Senator Susan Garrett, has an immediate effective date.

-House Bill 1881 (Public Act 95-183) which amends two sections of the Municipal Code to make specific changes regarding nuisances was signed into law on Tuesday, August 14th. The legislation amends the section of the State law that allows the municipality to cut weeds to add the cutting of grass, trimming of trees/bushes and removal of nuisance bushes or trees. In the section that allows the removal of elm trees infected with Dutch elm disease- the removal of ash trees infected with the emerald ash borer was added. This new law, sponsored by Representative Kathy Ryg and Senator Susan Garrett, also has an immediate effective date.

- On Tuesday, August 14th the Governor took opposite action on two bills that sought to extend the term of a Tax Increment Financing (TIF) district in certain municipalities. The Governor signed into law House Bill 2918, sponsored by Representative Don Moffitt and Senator Mike Jacobs, which extended the life of the TIF in the city of Galesburg (Public Act 95-164). However, he used his veto power to strike down House Bill 2036 which sought to extend the life of the Tax Increment Financing (TIF) District in the city of Villa Grove. The Governor’s message indicated that he did “not agree with some aspects of House Bill 2036”. The sponsors, Representative Chapin Rose and Senator Dale Righter, can seek an override. In related action earlier this summer the Governor approved House Bill 2307 (Public Act 95-15) which extended the life of the TIF in the village of Riverdale. That bill, effective upon the July 16th signature, was sponsored by Representative Will Davis and Senator James Meeks.

- The House and the Senate are in perfunctory session next week. Perfunctory session days permit limited activity to occur; the Secretary of the Senate or the Clerk of the House can read any legislative measure into the official record, committees may meet and consider and act upon legislative measures, and the Secretary or Clerk may receive and read committee reports into the record. However, legislators are not required to attend a perfunctory session nor can any further action be taken with respect to a legislative measure. Both chambers have been advised that they may be asked to return to Springfield with short notice to conduct official business.




For more information, contact Greg St. Aubin, Director of IAR Governmental Affairs, gstaubin@iar.org, or Julie Sullivan, Assistant Director, Legislative and Political Affairs, jsullivan@iar.org.

Contact information for members of the House and Senate, notice of committee hearings, text of legislation and roll call votes are all available on the Illinois General Assembly’s Web site, www.ilga.gov.

Illinois State Treasurer's Office

The Illinois State Treasurer's office will be participating in this years RANWC Open House on September 14th. The Treasuer's office will be on hand with their unclaimed property computer system. Event attendees with have the opportunity to search for unclaimed property. Stay tuned for more details...

State Budget Updates

For constant updates on the state budget and other issues in Springfield, please visit www.thecapitolfaxblog.com