Two thousand and eight is likely to be remembered as the year when the Democrats finally abandoned their base and cynically bent their knees to the will of Senate Republicans obsessed with slamming the door to homeownership closed to the minority, the female, the immigrant, and the working class of America. While multi-billion dollar bailouts to Wall Street investor and homebuilder fatcats are spun as bringing critical aid to crumbling markets, the Bush Administration and its amen corner in the Senate are trying to leave its stamp on affordable housing by killing off one of the most successful experiments in low income homeownership in a generation: privately funded downpayment assistance.
Saving money for a downpayment is hard in the best of times. For many minorities it is near impossible, and arbitrary downpayment standards have redlined black and brown communities out of homeownership opportunities for decades. The answer for almost a million families is privately funded downpayment assistance.
This model of homeownership depends on non-profits to raise money for downpayments from private sellers of real estate that can be used to help an infinite number of families. HUD has tried several times since this model was invented a decade ago to kill it, arguing either the families that needed were somehow "unworthy" of homeownership or could not be counted on to pay their mortgages on time. Now the same voices have a new argument claiming that according to their numbers these programs are driving the FHA program into the red and costing over a billion dollars in losses. Unfortunately, their numbers are as fake as their Martin Luther King Birthday speeches committing to equality and opportunity for all.
Recently, former HUD Secretary Alphonso Jackson passionately argued for a regulation that would have banned this program for America's families. Why? Because the Republicans only believe in an "Ownership Society" for those that already have it. Fortunately, two federal judges threw out Secretary Jackson's and his mouthpiece FHA Commissioner Brian Montgomery's regulation citing that HUD broke the law and had to start over.
Justice prevails? Not so fast...the Senate Democrats have come riding to the rescue in the form of Chris Dodd. Dodd, in his quest for "bi-partisanship," has abdicated his commitment for the underserved -- and the rest of the Democrats, like sheep to the shearing, have unquestioningly followed suit.
On April 10, 2008, the Democrat-led U.S. Senate voted 84 - 12 for H.R. 3221, the Foreclosure Prevention Act, or better titled, "The Homeownership Prevention Act." This measure would not only make law THE VERY REGULATION that the federal courts banned killing private downpayment assistance, but went further and RAISED FHA downpayment requirements from 3% to 3.5%. This is the payoff for all of the working class people who voted Democrat in the last election?
Fortunately the House of Representatives has not forgotten about the families in distress. Barney Frank and Maxine Waters along with Speaker Pelosi has smartly put the brakes on the Senate Democrats' dereliction of duty and are thoughtfully considering legislation that remembers the people that sent them to Congress.
The only bailout in this bill was for Wall Street. It was business as usual for Senator Shelby and his Cato Institute cronies, once again slamming the door on homeownership to millions of minority and working families across the country. What a good laugh they must be having at having the Democrats abandon their base when they need them most.
The voters won't be fooled. The hard-working Americans -- blacks, Latinos, women, recent immigrants, and just every day working Americans who put the Democrats back in charge in the Senate -- are paying close attention. We're also paying attention to our presidential candidates as well.
The mission should be to help prospective homeowners, not hurt them. Mend down payment assistance by enacting sensible reforms. Don't kill it off. And finally, at the very moment when this country needs economic stimulus, don't close the doors of homeownership and the aspirations of the millions of families seeking to build a better life for themselves. Remember who sent you here. The American people deserve no less.