FOR IMMEDIATE RELEASE
ICBA Supports Finance Board Plan for Affordable Housing
Washington, D.C. (June 16, 2008)—The Independent Community Bankers of America (ICBA) supports the Federal Housing Finance Board's (FHFB) proposal to use Affordable Housing Program (AHP) subsidies - available through the Federal Home Loan Banks (FHLBs) - to help homeowners struggling with the burdens of unaffordable mortgages.
"This is another way for the Federal Home Loan Banks to support housing and use their resources to help homeowners stay in their homes during this difficult time," said Ann Grochala, ICBA's director of lending and accounting policy, in a comment letter to the FHFB. The FHFB proposes to temporarily allow FHLB members to use a portion of AHP subsidies to refinance or restructure eligible households' nontraditional or subprime owner-occupied mortgages.
ICBA also called on the FHFB to ensure that AHP subsidies are used appropriately. "ICBA urges the finance board to ensure that the final rule contains the appropriate safeguards to ensure that AHP subsidies help homeowners in trouble, not bail out the irresponsible lenders that put them there."
"Unfortunately, some lenders used predatory practices and were more concerned about making the loan than ensuring that it was an affordable loan for the borrower," Grochala said. "The result has been too many homeowners across the country facing foreclosure. ICBA agrees with the Finance Board's position that AHP subsidies should not be used to compensate FHLB members for earnings foregone on the original loan, particularly when a loan may have carried an interest rate well above market rates."
Read ICBA's letter at www.icba.org.