The Texas Senate Intergovernmental Relations Committee held the first of what promises to be several hearings to explore the home foreclosure crisis in Texas and the state’s role in addressing the issue.
The committee, chaired by Dallas Senator Royce West (D), heard testimony from the Texas Department of Housing and Community Affairs and the Texas State Affordable Housing Corporation in a hearing at the Capitol last Wednesday. State housing officials testify about their efforts to establish foreclosure counseling hotlines. Some discussion also occurred about the new HUD Neighborhood Stabilization Program (NSP). The NSP program provides funds through the state to assist local governments in acquiring foreclosed properties to prevent them from becoming a physical and economic blight on surrounding communities.
Both the State and Texas major cities have struggled to come up with ways to administer this program which was initially funded just several weeks ago. Affordable housing advocates and practitioners have raised concerns over initial requirements imposed at the State and local levels that the funds be made available in the form of loans, thus excluding the ability of the program to be used provide the deeper subsidies necessary to allow the NSP program to serve lower income families.
Congress greatly expanded the NSP program in the economic stimulus bill. In the second round of funding the program is established as a national competition as opposed to an entitlement block grant which was the form the initial round of funding took. The fact that State and local government entities have not been able to develop a plan to carry out the first round program yet, and the failure to come up with workable guidelines for the program that can be embraced by local housing providers serves as a reason to doubt that Texas will be effectively able to compete in the second round of national competition for funding.
The video of the Senate Intergovernmental Relations Committee initial hearing on housing foreclosure can be viewed online.
The Committee’s second hearing is scheduled for this coming Wednesday. Witnesses will include local housing officials who are working to design programs for the implementation of the Neighborhood Stabilization Program within their cities along with tax assessor’s who will be asked to describe the dimensions of the housing foreclosure crisis in Texas.
Speaking of the dimensions of the housing foreclosure crisis in Texas, as I noted in posting several months ago, there seems to be considerable political spin to try to convince the public that Texas has not suffered from foreclosures to the degree of many other states. When the actual number of home foreclosures is considered this is clearly not true. Yet there is an unfortunate trend, fueled by some political leaders and by the lending community, to downplay the seriousness of the problem. From the industry’s standpoint this is clearly a product of their desire to head off state legislative initiatives to curb the type of lending abuses that created the problem and to provide consumers relief in the home foreclosure process.
As the Senate Intergovernmental Relations Committee moves forward with its hearings is important that the Committee understand the monumental dimensions of this problem and that it focus on the essential steps the Texas Legislature needs to take to prevent lending abuses in the future and to ensure that the State acts swiftly and effectively to seize the opportunities to access federal programs to help those Texans facing foreclosure. The Chairman of the Committee, Senator West has said this is his intention and that is a good start.
