[Congressional Record Volume 141, Number 6 (Wednesday, January 11, 1995)]
[Extensions of Remarks]
[Pages E71-E72]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


   INTRODUCTION OF THE ``HOUSING COUNSELING ENHANCEMENT ACT OF 1995''

                                 ______


                      HON. JAMES A. TRAFICANT, JR.

                                of ohio

                    in the house of representatives

                      Wednesday, January 11, 1995
  Mr. TRAFICANT. Mr. Speaker, today I am introducing the ``Housing 
Counseling Enhancement Act of 1995'' to help veterans stave off 
foreclosure and keep their homes. I urge my colleagues to cosponsor 
this important legislation.
  My bill contains two major provisions. First, the bill strikes from 
the notification provision of the Housing and Urban Development Act of 
1968 the cause that excepts individuals who receive loans backed by the 
U.S. Department of Veterans Affairs [VA]. It is common knowledge that 
housing counseling services have helped dramatically in staving off 
foreclosures of loans backed by the U.S. Department of Housing and 
Urban Development [HUD]. After successfully extending the program to 
those with conventional loans through enactment of the Emergency 
Homeownership Counseling [EHC] Program. I again attempted to extend the 
service to those with VA-backed loans during the past Congress. My 
amendment to H.R. 3838 would have included VA-backed loans in the 
program by contacting VA borrowers 45 days delinquent in making a 
mortgage payment and notifying them that there are housing counseling 
services available to him or her via a 1-800 number. The measure, like 
the amendment, will not mandate any type of VA involvement. Rather, it 
will give the borrower additional means to avoid a nightmare.
  Although the VA offers its own counseling services, they are far less 
effective because the borrower is not notified until he or she is 105 
days delinquent. As anybody who has faced foreclosure will tell you, 90 
days is already too late, let alone 105. Consequently, although the 
delinquency rate of HUD-backed loans--7.81 percent--was higher than VA-
backed loans--6.73 percent--in 1993, the percentage of loans in 
foreclosure was nearly the same for HUD loans--1.43 percent--as it was 
for VA loans--1.34 percent. Of course, compare these numbers to those 
of conventional loans--2.65 percent delinquency, 0.72 percent 
foreclosure--and we see the positive influence of the EHC Program 
reflected.
  Housing counselors have urged me to help the roughly 3.5 million 
borrowers with VA-backed loans avoid foreclosure. I believe this 
provision is a step in that direction. The Mortgage Bankers Association 
of America has expressed, from a lender perspective, that this 
provision is economically sound because it helps to prevent costly 
foreclosures. Congress should heed its input. With each foreclosure 
costing the Government an average of $28,000, Congress can ill-afford 
not to adopt the bill.
  Second, the bill authorizes $62 and $65 million in funding for fiscal 
years 1996 and 1997, respectively, for all counseling programs. Half of 
these amounts, which are identical to what was included in H.R. 3838, 
are earmarked for the EHC Program.
  Mr. Speaker, at times Congress passes spending programs that appear 
one-way in nature. We spend the money, but never see the benefits. The 
EHC Program, however, is a preventative service has a proven track 
record of helping homeowners avoid nightmarish and costly foreclosures.
  Again, I urge my colleagues to sign on as a cosponsor to the Housing 
Counseling Enhancement Act of 1995.
                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Housing Counseling 
     Enhancement Act of 1995''.

     SEC. 2. EXTENSION OF PROGRAMS.

       (a) Emergency Homeownership Counseling.--Section 106(c)(9) 
     of the Housing and Urban Development Act of 1968 (12 U.S.C. 
     [[Page E72]] 1701x(c)(9)) is amended by striking ``September 
     30, 1994'' and inserting ``September 30, 1997''.
       (b) Prepurchase and Foreclosure-Prevention Counseling 
     Demonstration.--Section 106(d)(13) of the Housing and Urban 
     Development Act of 1968 (12 U.S.C. 1701x(d)(13)) is amended 
     by striking ``fiscal year 1994'' and inserting ``fiscal year 
     1997''.

     SEC. 3. NOTIFICATION OF DELINQUENCY ON VETERANS HOME LOANS.

       Subparagraph (C) of section 106(c)(5) of the Housing and 
     Urban Development Act of 1968 is amended to read as follows:
       ``(C) Notification.--Notification under subparagraph (A) 
     shall not be required with respect to any loan for which the 
     eligible homeowner pays the amount overdue before the 
     expiration of the 45-day period under subparagraph 
     (B)(ii).''.

     SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

       Section 106 of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x) is amended--
       (1) in subsection (a), by striking paragraph (3);
       (2) in subsection (c)--
       (A) by striking paragraph (8); and
       (B) by redesignating paragraph (9) (as amended by section 
     2) as paragraph (8);
       (3) in subsection (d)--
       (A) by striking paragraph (12); and
       (B) by redesignating paragraph (13) (as amended by 
     subsection (a)) as paragraph (12);
       (4) in subsection (f), by striking paragraph (7); and
       (5) by adding at the end the following new subsection:
       ``(g) Authorization of Appropriations.--There are 
     authorized to be appropriated to carry out this section 
     $62,000,000 for fiscal year 1996 and $65,000,000 for fiscal 
     year 1997. Of any amounts appropriated for any such year to 
     carry out this section, the Secretary shall use not less than 
     50 percent to carry out subsection (c) and the Secretary may 
     use 50 percent (or such lesser amount as may be appropriate) 
     for counseling for renters. Any amounts appropriated pursuant 
     to this subsection shall remain available until expended.''.
     

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