Officials Forum: Keeping a Roof Over Our Heads

Written by

U.S. Rep. Charles B. Rangel
U.S. Rep. Charles B. Rangel The Honorable Charles B. Rangel is serving his 22nd term as the Representative from the 13th Congressional District, which stretches from upper Manhattan to northwest Bronx. A founding member of the Congressional Black Caucus, he made history as the first African American member of Congress to lead the powerful House Ways and Means Committee. He is a member of the Joint Committee on Taxation.

The collapse of the American housing market that began in late 2006 has brought our economy to its knees and left Americans from all walks of life without a home or struggling to keep a roof over their head.

A culture of deregulation and irresponsible consumer lending that was widespread during the George W. Bush Administration caused an unprecedented housing crisis which has affected every town across America – big and small, Republicans and Democrats alike.  Consequently American families everywhere are still suffering.  We must work together in Congress to rebuild our housing market and help people get back on their feet.

Over the last five years American homes have lost seven trillion dollars in value.   These declining prices have caused many families facing foreclosure to “short sell” their homes for less than they paid for them, and sometimes for less than the outstanding mortgage debt.  An estimated four million American families, at no fault of their own, have lost their homes to foreclosure since 2007.

The number of short sales and foreclosures skyrocketed since the housing market collapsed.  At the time, those losing their homes were unaware that any loans forgiven after a “short sell” or foreclosure would be considered taxable income. That is why I authored the Mortgage Cancellation Relief Act, which was signed into law in 2007.  The law relieves that unfair tax burden by removing the “phantom” income in cases where the lender forgives part of the mortgage on the sale or disposition of one’s home.  While the law cannot repair the borrowers’ credit or punish those who misled them into taking out inappropriate loans, it addresses a fundamental unfairness in the lives of those who find themselves in these dire circumstances.

Congress must not let the Mortgage Cancellation Relief Act expire at the end of the year.  Today 12 million Americans are on the verge of losing their homes because they owe more money than their home is worth.  Republican or Democrat, none of us in Congress wants to see our constituents who have just lost their homes be forced to pay unforeseen taxes when money is already tight.  We should put our political differences aside to do what is right for the American people.

In effort to provide some immediate relief, more than 110 of my Democratic Colleagues and I sent a letter last week to Edward DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA), urging him to allow loan forgiveness for struggling homeowners.  The Agency, which oversees Fannie Mae and Freddie Mac, owns or guarantees more than half of all mortgages in the United States.  The road to economic recovery calls for shared responsibility and sacrifice.  Loan forgiveness will keep American families in their homes and save taxpayers money by preventing foreclosures.

Moreover, we must also provide access to affordable housing in urban communities with mostly high-rise residential buildings such as those in my Manhattan Congressional District.  Across the country there are only 62 affordable housing units available per 100 low-income tenants.  Passage of my Public Housing Tenants Respect bill would remove the barriers that limit access to public housing for our most vulnerable citizens. In these challenging economic times, we must protect the unemployed and low-income families as they strive to rejoin the workforce and gain their financial foothold.

The sanctity of our homes is at the heart of the American Dream.  Whether you own a house, rent an apartment or live in public housing, adequate housing is a fundamental universal human right.   Every American deserves a roof over his head.

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