Bill Overview
Title: Preserving Homes and Communities Act of 2022
Description: This bill establishes requirements for the sale by the Department of Housing and Urban Development of non-performing single-family residential mortgages that are insured under the National Housing Act.
Sponsors: Sen. Reed, Jack [D-RI]
Target Audience
Population: People living in homes with non-performing single-family residential mortgages insured under the National Housing Act
Estimated Size: 1500000
- The bill impacts the sale of non-performing single-family residential mortgages.
- The non-performing mortgages must be insured under the National Housing Act, narrowing the scope to those involved with federally insured loans.
- Borrowers with non-performing mortgages will be directly impacted as the sale of their mortgages could lead to changes in loan terms or servicing.
- Mortgage servicers involved with such loans will also be affected, as they are key players in managing these non-performing loans.
- Communities with high rates of non-performing federally insured mortgages will experience indirect impacts, such as changes in housing stability and market conditions.
Reasoning
- The Preserving Homes and Communities Act of 2022 primarily influences homeowners with non-performing mortgages, estimated at around 1,500,000 people, but not all will feel the impact directly and equally due to variations in mortgage status, insurance, and location.
- The initial budget allocation of $50 million for year one necessitates a focused implementation strategy, likely prioritizing specific geographical areas or types of borrowers (e.g., those in severe default or facing immediate foreclosure).
- Given the act's concentration on federally insured, non-performing mortgages, the most affected individuals will be those with FHA loans who are at risk of foreclosure, providing them potential relief and stabilization in housing.
- Community impacts are expected but might not be immediate or deeply felt in the first few years of the policy, as changing mortgage terms takes time to influence wider market conditions.
- Over a ten-year period, the broader stability and reduced foreclosure rates could positively influence entire neighborhoods, but early-year reporting will reflect more personal than community-wide changes.
Simulated Interviews
School Teacher (Detroit, MI)
Age: 45 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- I'm really worried about losing my home, especially since I'm the sole provider for my kids. I hope this bill means some relief is coming our way.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 8 | 4 |
| Year 20 | 8 | 4 |
Retired (Phoenix, AZ)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This policy gives some hope that I can sort things out without losing my home entirely, which is crucial for someone on a fixed income.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Mortgage Servicer (Charlotte, NC)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- From a professional standpoint, this policy has increased my workload because we are trying to accommodate new terms quickly. However, it could help families keep their homes, which I support.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Real Estate Agent (Houston, TX)
Age: 42 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I see this policy as a stabilizer. It might slow down the influx of foreclosures, but I'm curious to see if it significantly shifts market trends.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Construction Worker (Philadelphia, PA)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I don't have a mortgage, but housing issues affect us renters too. If more people can stay in their homes, maybe we won't see rent spikes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Farmer (Rural Iowa)
Age: 55 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 0.0 years
Commonness: 5/20
Statement of Opinion:
- It's unclear how this will help areas like mine, where farm loans and property issues are more common than basic mortgages, but any help in housing can ripple outwards.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 4 | 4 |
| Year 3 | 4 | 4 |
| Year 5 | 4 | 4 |
| Year 10 | 4 | 4 |
| Year 20 | 5 | 4 |
Small Business Owner (Brooklyn, NY)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- Policy interventions can help stabilize markets. As an investor, stability is good but too much intervention can sometimes lead to inefficiencies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Graduate Student (Los Angeles, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I'm hoping that if people can keep their homes longer, it might eventually make buying less daunting for new buyers like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Retired Banker (Miami, FL)
Age: 67 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- As someone who relies on property income for retirement, mortgage policy changes can affect potential revenues indirectly. So far, this seems positive for occupancy rates.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
IT Specialist (Chicago, IL)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I fear going back to where I was last year with my mortgage. These types of policies seem like a safety net that should be maintained.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 6 |
Cost Estimates
Year 1: $50000000 (Low: $40000000, High: $60000000)
Year 2: $45000000 (Low: $36000000, High: $54000000)
Year 3: $40000000 (Low: $32000000, High: $48000000)
Year 5: $35000000 (Low: $28000000, High: $42000000)
Year 10: $20000000 (Low: $16000000, High: $24000000)
Year 100: $5000000 (Low: $4000000, High: $6000000)
Key Considerations
- The effectiveness of the sale process in addressing non-performing loans and ensuring borrower stability.
- Potential legal and administrative challenges in executing sales and implementing new mortgage terms.
- Community-specific impacts, necessitating localized approaches to housing stabilization.