Live Chat: Rep. Raúl Grijalva Discusses The Right-To-Rent Bill With Blue America
On June 30th we hosted Rep. Raúl Grijalva (D-AZ) here at C&L for an open ended discussion that started with the immigration reform debate. Rep. Grijalva has graciously agreed to keep us up to date on what's going on in Congress and in the Progressive Caucus he chairs once a month. He'll be visiting with us again today (in the comments forum below) and I've asked him to talk with us about a new bill he and Marcy Kaptur introduced in April, the Right-To-Rent Act, H.R. 5028. The Obama Administration's somewhat tepid HAMP program isn't working and millions of families are still facing foreclosures by avaricious bankers. Rep. Grijalva's bill would let foreclosed families stay in their homes as renters at a fair market rate set by a judge. If banks don't want to become landlords, they would have incentives to renegotiate the terms of the mortgage. The foreclosure crisis needs exactly this kind of creative, common-sense solution, and the Congressman has been out in front on this issue from the beginning. Dean Baker's Center for Economic and Policy Research called the bill "one of the most efficient and simple ways to help millions of families facing foreclosure remain in their homes."
It would increase the bargaining power and security of homeowners by temporarily changing the rules on foreclosure and allowing homeowners to remain in their homes as renters for a substantial period or time. During this time, homeowners would pay the market rent for the home as determined by an independent assessment.
"Right to Rent immediately gives the homeowner security in their home. They will be allowed to stay there for a substantial period of time, allowing their children to stay in their schools and families to prepare for and plan their future moves," said Baker in his testimony on Wednesday. "Right to Rent also would make foreclosure much less attractive to investors. This gives investors more incentive to modify loans on their own, without the involvement of the government."
The GOP is going after Congressman Grijalva's seat like they never have before. They're trying to stir up divisiveness based on the immigration issue in his southern Arizona district. Blue America has a donation page specifically for his campaign One America and we're hoping you'll visit and leave a little token of your appreciation for his leadership and courage. There's an alternative though-- a memorabilia auction on eBay! We love all of these items, but are particularly fond of the “doodles.” No two are ever alike, and the two that we are auctioning are particularly exceptional, both for their intricate detail (look for the faces and eyes!), as well as for the setting in which they were drawn (Natural Resources Committee hearings concerning Deepwater Horizon).
Check them out!
Our favorites are the CLEAR Act Markup "Doodle” and the Deepwater Horizon & MMS Hearing "Doodle”. There's also a high quality, union made, perfectly tacky Grijalva bowling shirt and a couple of exceptionally cool bumper stickers.
Congressman Grijalva, welcome back to C&L. Thanks for stopping by today. And thanks for this awesome piece of legislation. Before we get into the strategy of passing the bill in the House and Senate, can you just explain the ramifications of it to people who might not be familiar with Right-to-Rent
Sorry to everyone for the technical problems. The bill is simple. HR 5028 creates a “Right to Rent,” for homeowners facing foreclosure. “Right to Rent,” or R2R, would allow homeowners whose homes have been foreclosed to stay in their homes at a fair market rent determined by an appraiser. The homeowner has 25 business days from the time of notice of foreclosure to seek relief.
R2R would allow families to stay in the houses that are their homes, while also lowering the family’s monthly housing costs, and allowing the mortgage holder to receive a fair-market return on their property.
The bill aims to give relief to middle-income homeowners, not speculators or people living in unaffordable mansions. To be eligible for R2R relief, the home must be have been purchased for a price the median purchase price for the local metropolitan area as measured by the National Association of Realtors.
Furthermore, the home must be a “single family property,” a condominium with an undivided interest in common areas, or a similar dwelling in a multi-unit project that has been occupied for at least 2 years, and the mortgage must have been originated on or before July 1, 2007.
The homeowner, upon receiving notice of foreclosure, may go to a court within 25 business days and petition for exercise of their right, granted under the bill, to obtain a tenancy for up to 5 years, at a fair market rate determined by a court-appointed, independent appraiser.
before the Congressman is here.
Rep. Grijalva is having computer problems but his technical staff is working on it and he should be with us in a few minutes. Sorry for the delay.
it astonishes me that it hasn't received more coverage. I can see legal impediments since it fundamentally alters the essence of mortgage contracts and the remedies contained therein in case of default. But it should be obvious to the lenders that fire sale prices on forced sales do nothing to help their bottom lines and only further depress the housing market. I don't understand why they wouldn't get on board. If they don't want to be landlords they can certainly sub that to any number of property management firms.
Hasa Diga Eebowai
Greg Kaufmann from The Nation has been instrumental in trying to get more attention for this issue, but you're right. I believe that the entire foreclosure crisis has been mishandled - not only should this legislation have been part of the original package, we needed cramdown from the beginning. Courts should have been directed to change mortgage rules long ago. Obviously, giving direct money to banks with the condition that they readjust potential foreclosures has not worked. Voluntary measures won't get this done. As this crisis continues, we believe our legislation plus cramdown will be given more attention.
are never considered s much when it comes to the mortgage and banking industry.
is what is needed.
One 'right' I would like to see is something like this: Every month that a homeowner makes the full mortgage payment on the home, he earns the 'right' to make a $100 'rent payment' instead of the usual mort. payment. This rent payment would/could not go against the principle on the loan, so would not encourage people to make/take this option, but would give homeowners rights (and the opportunity) to fight to stay in their homes when times get tough.
Cue the Kabuki....
Right-to-rent will dramatically lower monthly housing costs in most cases. It will allow families to stay in their homes. This is the exact opposite of a bailout for banks, predatory lenders or financial speculators -- this is giving working people a chance to stay in their homes at no cost to the taxpayer and making sure communities don't lose property value. The top community benefit is stabilizing family and neighborhood equity.
because even in hard times most homeowners should be able to afford $100, but afford rent? How much? If a family loses its source of income and can no longer afford their $1000-1500 mort payment how are they going to afford to pay $500-1000+ in market rent rates?
Each homeowner pursuing a different "independent assessment" seems like another long HAMP-like hoop for homeowners to jump through when they need help and need it ....yesterday.
Please simplfy and streamline any/all policies and give all homeowners the RIGHT to lower their payments on THEIR house w/out standing in long lines and dealing w/ banks/bureaucracy/bullshit.
Thank you.
Cue the Kabuki....
OK, so what's the prognosis for the bill in Congress? Where is it committee-wise? Do you think you have the votes to pass it or will Blue Dogs and other Democrats corrupted by bankster campaign cash team up with the GOP to kill it?
We've been talking to the Financial Services Committee and working to address any concerns they may have. It will be tough to fight the banks, to be honest. We hope that at a minimum, we're given a hearing so that the legislation gets the attention it deserves. That alone would dramatically increase support for it. Like all good legislation, there are political calibrations that cause good bills to languish and sometimes not see the light of day. I'm going to fight to make sure that doesn't happen in this case.
I would think there is a huge interest in this in Arizona because Arizona has more than it's share of foreclosures... Correct? What does your opponent say about this bill?
If you're talking about Ruth McClung, the odds are that she doesn't even know about it. It's supported by progressive economists, conservative economists (including the American Enterprise Institute) and everyone in between. This is not a partisan measure. I'd be interested to hear what conservative opposition to this legislation exists. There's no policy reason to oppose it.
As far as what's going on in Arizona, as around the rest of the country, it's clear that HAMP has failed to prevent foreclosures. Because of its high foreclosure rate, it would be one of the states to benefit the most from the legislation. (Arizona and Nevada are the top two, in fact.) As far as why HAMP isn't working, Huffington Post had a great story on this: "The Treasury Department claims that Fannie Mae, which administers its Home Affordable Modification Program, screwed up. As a consequence, the public can no longer tell whether homeowners with HAMP modifications, which limits monthly payments to 31 percent of income, are being placed in sustainable mortgages. A voicemail message left on the cellphone of a Fannie Mae spokesman seeking comment was not returned." http://www.huffingtonpost.com/2010/07/27/hamp...
"A voicemail message left on the cellphone of a Fannie Mae spokesman seeking comment was not returned."
Color me shocked.
Congressman G you are a hero of mine!
You can ask my husband, I have talked about this plan for at least a year or two. What I would like to ask is, would any of that rent money be applied in some way toward the mortgage if for some reason the owners find a way to go back to their original mortgage payments?
Say what you mean. Mean what you say. But don't say it mean.
Under the bill, rental payments wouldn't go back to pay for a mortgage whether it's modified or not. There's a five-year cap on the rental agreement, after which the mortgage market should be back on Planet Earth. At that point, homeowners start back right where they left off. Some banks will certainly choose to renegotiate. Giving homeowners the right to rent gives them power to renegotiate up front if banks don't want to become landlords, which many have no interest in. Some critics have said the banks will lose money on these deals, but if they evict people they'll be paying a property manager anyway. This way they have people who care about and maintain the properties.
Thank you very much for your answer. I just felt if some of the rent money could be held in escrow for a set time, maybe the home owner would have even more incentive to stay in the home and take even better care of it knowing they might at least have a hope for some day owning it.
Say what you mean. Mean what you say. But don't say it mean.
When you put forward tough legislation like this, do you ever take into account the likely reaction from the much much more conservative (and bankster-friendly) Senate? Amato talked with Jeff Merkley about your bill and Merkley, a supporter, felt it would be difficult to pass in that Chamber.
We have support on the Senate side. If there's movement in the House, we're confident a senator will introduce companion legislation. Whatever they may say over on the other side of Capitol Hill, the Senate tends to follow more than it leads. When we get movement, the Senate will show its cards and we'll see how much support we really have. It's a byzantine process, and you never know what can happen, but people all over the country will have the chance to see what Congress is doing for them during the downturn and who's willing to get creative to help them.
and he seems to think that the RepublicNoes probably will try to kill it there.
That is what it would seem to me too but in this age Republicans will oppose anything.I don't know much about this bill but it seems on the face that it is very sensible. Can you get other big name sponsors for this bill Like Alan Grayson?
Mr. Grayson will bring good leadership to this legislation. Thanks for the suggestion. We'll be contacting him soon.
Our current co-sponsors:
Rep Brown, Corrine
Rep Cohen, Steve
Rep Conyers, John, Jr.
Rep Ellison, Keith
Rep Hirono, Mazie K.
Rep Jackson Lee, Sheila
Rep Jackson, Jesse L., Jr.
Rep Kaptur, Marcy
Rep Kucinich, Dennis J.
Rep Norton, Eleanor Holmes
Rep Watson, Diane E.
Rep Weiner, Anthony D.
We especially appreciate Reps. Kaptur and Conyers' support and leadership.
we'll pick up.
As we mentioned above, please check out the eBay auction for Congressman Grijalva's reelection. Or just donate at Blue America's One America page.
I did check it out and was a little bummed to find out that the auction ended at midnight. That is a tough time to end an auction. I will bid but I know I will be out bid at 11:59:45 pm.because I will be asleep.
Let me change the subject for a minute if I can. What happened yesterday in the House with the Afghan war funding? It looked like progressives came closer to shutting off the funding than ever before. Do you think it could actually happen next time the president asks for a supplemental budget to continue the occupation?
Yes, we did come close. The pressure on those Democrats that voted yes will be twofold:
1) The quagmire in Afghanistan.
2) War payments increasing the deficit.
I would have preferred to defeat the supplemental, but the number of votes against it was very encouraging. It was a tough vote, but I really believe the next time the president comes to us with an unpaid war bill, he's going to have a very hard time.
Very true because it is painfully obvious that every dollar spent on this war is wasted and we now have no good excuse to continue. From now on every $$$ is a wasted $$$ and the bigger point is that everybody knows it.
on these threads where Americans get to converse with their reps but I must ask at least one strategy question. It would seem to me that such a bill could really help to stabilize the housing industry. That would be very much in the interests of all the lenders. Has any attempt been made to bring them on board? I would think that if they joined the fray on the side of this bill that could influence at least some of the Republican opposition to support such a bill.
Hasa Diga Eebowai
If you are going to come here and start talking sense you will be asked to leave.
/snark
We hope they'd see the benefit in steady, stable income from renters versus speculating in hope of marginally higher profits, which is what got us into this situation in the first place. Right now we're working with community organizations to build grassroots support. A concerted effort with lending institutions needs to be started, but we want to concentrate on community support first. It's important that people know this option is on the table. When they understand the importance of a creative solution, the financial industry will follow.
many of them that are guilty of robbing these homeowners in a multitude of schemes, get the right to decide whether they will steal the home back or renegotiate the loan.
They don't even deserve the right to exist after their little part in destroying the nation economically. Yet they can decide whether to rent to the victims of their crimes or to make another lucrative mortgage agreement with them?
I hope you'll forgive me if you think that is harsh... But Our family lost our home to a wonderful Countrywide mortgage disaster.
I'd be ready to start throwing tomatoes at anyone that suggested I rent from them or feed their mortgage mill profits again. And, even worse, that they would get to decide how to screw me over.
but this bill would stop the type of heartache you just went through.
We'll try harder. I apologize.
that both my wife and I did everything we could to get people in power that would do the right thing.
But I am pretty sure that a lot of homeowners are going to resent having to rent from the companies that screwed them over, and while saving the home is great if they get a new mortgage - the key to it should not be "rewarding the criminals with the option" on a new mortgage but getting the owners into a mortgage they can afford with more ethical mortgage providers.
The victims here, the homeowners that were herded into mortgage mills and/or are upside down - and many were literally scammed by these banksters schemes - are not going to be very happy with it.
Who would bear the "landlord" responsibilites in one of these situations? Let's say the AC conks out. Would the bank be responsible for replacing it? Having been a landlord for several years I know there are many things the landlord is responsible for taking care of in the rental home.
Say what you mean. Mean what you say. But don't say it mean.
If banks decide to be landlords, they can hire a property manager. For the large number of foreclosed homes that banks now control, I'm sure that for that inventory they would hire such a manager. The bill applies any local landlord-tenant laws to the situation -- rent and other property standards would be handled on a local basis.
Thanks again for your replies to my questions. I have just one more question then I promise to be quiet. What if a family is renting what was once their home and then the husband gets a great job that would allow the family to once again afford their original mortgage, could they pick up where they left off before they had to begin renting?
Say what you mean. Mean what you say. But don't say it mean.
The bill doesn't address that except to say that the five-year tenancy can be stopped at the discretion of the former homeowner. This is the kind of situation we hope to make happen: keep people in the home until the recovery helps them improve their financial picture. At that point, they ideally come to affordable terms with the bank and everybody comes out ahead.
laws a person wouldn't be able to get a new mortgage for 2 years. I'm sure that a new mortgage would have to be negotiated and some rules would have to be changed.
Much of the policy work on this bill was done by Dean Baker at CEPR. I can't thank him enough for focusing on this issue and the ways Congress can help. I encourage everyone to learn more at http://www.cepr.net/index.php/issues/r2r/
Thanks to everyone for tuning in, posting and making your voice heard. We apologize again for the technical problems that cut this chat a bit short -- we have everything ironed out and we don't expect it to happen again. Please check back for the next one some time in August.
See you then
I want to thank him for coming on. Anytime a member of Congress joins us there is the chance they will be called away. The great news is that he's going to be chatting with our community for quite a while and as you can see, he'll answer as many questions as you throw out there.
.. but want to thank everyone for an enlightening conversation.
I remember visiting "squats" in Geneva in 1990. Hundreds of apartment buildings lay vacant as real estate speculators waited for the market to improve while simultaneously rents were way too high for students.
So the students organized a "squatting committee" that provided questionnaires to potential participants, so they could match likely compatible persons to occupy a building.
Then on the designated day those chosen would be instructed to show up at a secret place with enough food, water, etc to hold the building for 48 hours. The Committee would drive them to the building, jump the electricity and turn on the water. If the police didn't evict them in 48 hours their squatter's right to occupancy allowed them to go before a judge and negotiate an agreement with the property owner. For instance, putting money for utilities in escrow, agreeing to allow the building to be shown to prospective buyers, agreeing to vacate the building within a certain time frame if/when the building sold.
Had some crazy fun times hanging out in the squats in Geneva.
No squatters rights in the USA.
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
I didn't know Clenis was available...
Diabolus est Deus Inversus
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