“Own-to-Rent” Proposal Would Allow Foreclosed Homeowners to Stay as Renters

Washington, DC – Rep. Raúl M. Grijalva today introduced H.R. 6116, the Saving Family Homes Act of 2008.

The Act would grant homeowners whose mortgages have been foreclosed the right to petition a judge to allow them to remain in the home as renters, and pay a fair market rent. The rent would be set by a court-appointed appraiser and adjusted annually for inflation.

The Saving Family Homes Act is one of the few proposed remedies for the current mortgage crisis which requires no expenditure of federal funds or additional bureaucracy, while giving immediate relief to millions of families facing foreclosure and preventing home vacancies that harm neighborhoods.

To prevent abuse by speculators, the Act limits eligibility to mortgages on single-family, principal residences, occupied for at least 2 years, which sold for less than the median home value in the metropolitan statistical area in which the home resides or the median value in the state if such information is not available.

“This bill is urgently needed for the millions of American families facing risk of foreclosure, and I am glad to have had the opportunity to make this statement that the sanctity of the American home and family should take precedence in this time of crisis,” said Rep. Grijalva. “I urge my colleagues to support this bill and look forward to making that effort to persuade them.”

Mortgage delinquency has doubled over the past year and approximately one in every four subprime mortgages is now delinquent. At the same time, home values are plummeting, and Moody’s Economy estimates 4 million mortgages are “underwater,” meaning the homeowner owes more on the mortgage than the home is now worth, and predicts that by early 2009, that number could rise to 12 million.