Campaign Promises

Departments -> Housing & Urban Dev

ItemHousing & Urban Dev
Affordable HousingGrade
HU-1The Promise: "Will support efforts to create an Affordable Housing Trust Fund to develop affordable housing in mixed-income neighborhoods."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:The key words in this promise,"create an Affordable Housing Trust Fund" may have sounded great to low income earners and garnered votes for then-Candidate Obama. In reality, a National Housing Trust Fund (NHTF) was enacted in Public Law 110-289 on 07/30/08, a few months prior to the publication of the Obama-Biden plan sourced above.

The President's Budget proposal for FY2010, and almost every year thereafter, included $1B "to capitalize and launch an Affordable Housing Trust Fund that will develop, rehabilitate, and preserve affordable housing targeted to very low income households." This was, in essence, the already-enacted NHTF.

However, the FY2010 budget Final Conference Report (111-366) did not view funding the NHTF favorably. It was the only budget item in the Housing and Urban Development (HUD) budget requested by President Obama that received absolutely no funding. The reason for this was because
the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) were both considered by Congress at the time to be failed Government-Sponsored Enterprises (GSEs) models.

To remedy this situation and in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on 07/21/10, HUD issued its report entitled "Reforming America's Housing Finance Market, A Report to Congress," on 02/11/11. In that report, HUD recommended better Government support for affordable housing by asking Congress to capitalize targeted access and affordability initiatives such as those mandated by Public Law 110-289.

On 03/03/11, Senator Jack Reed (D-RI) introduced the "Preserving Homes and Communities Act" (S. 489). This was followed by the introduction by Congressman Elijah Cummings (D-MD) on 04/12/11 of a companion bill (H.R. 1477). These bills were designed to provide the $1B capitalization needed by the NHTF from profits accrued from the sale of warrants that the federal government received from banks that were bailed out under the Troubled Assets Recovery Program (TARP). Neither bill got past the introduction phase and both expired with the 112th Congress.

Finally in FY2016, far from the annual request for $1B, the Housing Trust Fund was appropriated $182M and President Obama requested $136M for FY2017. These funds come from assessments from Fannie Mae and Freddie Mac. They will finance the development, rehabilitation and preservation of affordable housing for extremely low-income (ELI) residents, and will result in over 1,000 housing units produced over time.

The "Affordable Housing Trust Fund" did not require creation and the NHTF was not funded for most of President Obama's two terms in office.

This promise was not fulfilled.
HU-2The Promise: "As President, Obama will work with the state to establish a goal for approving all Road Home applications within two months."
When/Where: Obama-Biden Plan: "Rebuilding the Gulf Coast and Preventing Future Catastrophes", dated 09/11/08.
Status:The "Road Home" Program was funded at $10.4B to allow grants up to $150K per homeowner victim of Hurricanes Katrina and Rita. As of the end of CY2010, approximately 130,000 families (out of 230,000 applicants) had received affordable housing assistance valued at $8.9B from the state's housing recovery program administered by the Louisiana's Office of Community Development (OCD) via a contract with ICF International.

However, according to the Louisiana Recovery Authority (LRA), by the end of 2009 approximately 3,500 homeowners were still working their applications through the system and more than 200 still had open appeals cases. The LRA ceased to exist on 06/30/10 and its functions were assumed by the Disaster Recovery Unit of Louisiana's OCD. The OCD reported that as of end-CY2010, only 66 applications were in the appeal process. More than $700M in Road Home funds remained unspent and about 3,000 files remained open as of early CY2011 -- some of these being more than a year old.

This promise was not fulfilled.
HU-3The Promise: "Will also work to increase the supply of rental property, which is particularly important in New Orleans where 57 percent of pre-Katrina residents were renters."
When/Where: Obama-Biden Plan: "Rebuilding the Gulf Coast and Preventing Future Catastrophes", dated 09/11/08.
Status:Hurricane Katrina, according to the New Orleans Office of Community Development (OCD), destroyed 70% of housing stock including 51,000 rental units.

According to the Greater New Orleans Community Data Center (GNOCDC), the CY2010 number of new federally subsidized rental units needed was 20,896. Against this requirement, only about one third (7,754) were subsidized, leaving 13,429 not subsidized.

Projected subsidized rental unit requirements were provided by the GNOCDC as 23,034 in CY2012 and 26,837 by CY2015, escalating to 36,151 by CY2020.

As of end-CY2012, the OCD reported that New Orleans still had 43,755 blighted homes and that an estimated $9.9B was needed to complete the city's reconstruction needs, including rental properties. Against this need, federal grants in FY2012 amounted to about $17M broken out as follows:
- $10.830M from Community Development Block Grant (CDBG)
- $1.590M from HOME Investment Partnerships Program (HOME)
- $1.291 from Emergency Solutions Grant (ESG) Program
- $3.584 from Housing Opportunities for Persons with AIDS (HOPWA)

By end-CY2015, 35% of renters in the New Orleans-Metairie-Kenner statistical area devoted 50% or more of their income to rent and utilities. Only Miami was higher where 37.5% of renters shelled out 50% or more of their income to rent and utilities.

As of end-CY2016, New Orleans remained far behind in rebuilding its supply of apartment rentals following the total loss of at least 12,000 units after Hurricane Katrina. The metro area had added only about 3,100 units since CY2012.

This promise was not fulfilled.
HU-4The Promise: "...will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow Americans to easily compare various mortgage products and understand the full cost of the loan."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama on 07/21/10 created a Consumer Financial Protection Bureau (CFPB). One of the CFPB's missions was to "prescribe rules to ensure that the features of any consumer financial product or service, both initially and over the term of the product or service, are fully, accurately, and effectively disclosed to consumers."

In CY2015, the CFPB introduced the "CFPB Mortgage Tool" to help potential borrowers see the lowest interest rate available to them. Borrowers can use this tool to input their credit score, down payment, loan amount and zip code. The CFPB, using real data, will show the average and best interest rates available in the market in real time.

In 09/15, the CFPB introduced its second tool to assist potential borrowers, a clear, three-page loan disclosure form written in simple language that any borrower can understand. The disclosure form simplifies the following:
- The first part of the document reflects the loan amount, interest rate, monthly payment and any prepayment penalties or balloon payments as well as the total closing costs and cash required to close.
- The second part breaks the costs into two sections. The first section details closing costs that "you cannot shop for" and closing costs that "you can shop for." For example, a borrower cannot shop for a better mortgage insurance deal, but can shop around for better deals on title insurance and property inspections.
- The last section of the disclosure form is entitled "Comparisons," which simplifies the borrower's understanding of how much he/she will pay over a five-year period, including all expenses. When the borrower is shopping for mortgages, he/she can compare those five-year costs to see which lender is giving him/her the best deal when all costs are included.

Although these CFPB initiatives do not ultimately provide the potential borrower with a "score," the intent of this promise has been fulfilled.
HU-5The Promise: "...will also restore cuts to public housing operating subsidies, and ensure that all Department of Housing and Urban Development (HUD) programs are restored to their original purpose."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:President Obama's FY2010 budget request included $4.600B for the Public Housing Operating Fund (PHOF), which represented 100% of funding requirements for operating subsidies (since CY2002) as calculated by a formula devised through negotiated rule making. The amount appropriated by Congress for PHOF in FY2010 was actually $4.775B to mitigate prior year shortages. For subsequent years, funds requested for PHOF compared to the amount authorized by Congress were as follows:
FY2011....Requested $4.829B / Received $4.626B
FY2012....Requested $3.962B / Received $3.962B
FY2013....Requested $4.524B / Received $4.262B
FY2014....Requested $4.600B / Received $4.400B
FY2015....Requested $4.600B / Received $4.400B
FY2016....Requested $4.600B / Received $4.500B
FY2017....Requested $4.569B / Received $4.400B

Serious attempts were made by the Obama Administration, within budget constraints (i.e. sequestration), to reach the annual goal of $4.600B for the PHOF.

This promise was fulfilled.
Community DevelopmentGrade
HU-6The Promise: "...will work to provide states and local governments with the resources they need to address sprawl and create more livable communities."
When/Where: Obama-Biden Plan: "Strengthening America's Transportation Infrastructure" dated 10/09/08.
Status:On 05/21/10, HUD Secretary Shaun Donovan correlated the alarming rate of home foreclosures with access to transportation, good schools and economic opportunity (i.e. jobs).

Under President Obama, the federal government took steps to advance sustainability among buildings and communities under a $3.25B "Sustainable Communities Planning Grants" program administered by the Department of Housing and Urban Development (HUD) under the aegis of its Leadership in Energy and Environmental Design for Neighborhood Development (LEED-ND) initiative.

The objective of the above grant program was to integrate green building into community development, help reduce sprawl, increase transportation choices, decrease automobile dependence, encourage healthy living, and protect endangered species. This is where a role for the Environmental Protection Agency (EPA) and Department of Transportation was defined in a partnership with HUD on 10/21/10.

The President's "Sustainable Housing and Communities Initiative" became an integral part of the Community Development Block Grants (CDBG) Program, later renamed the "Community Development Fund" (CDF). Starting with FY2009, the $3.900B appropriated for the CDBG under President Bush was supplemented by $3.000B under the American Recovery and Reinvestment Act (ARRA) of 2009, signed into law on 02/17/09 by President Obama. During subsequent years, the CDBG/CDF was funded as follows:
FY2010....$4.450B plus $100M for disaster relief
FY2013....$3.308B plus $15.007B for disaster relief

This promise was fulfilled.
HU-7The Promise: "The Community Development Block Grant (CDBG) program is an important program that helps strengthen cities and towns throughout the nation by providing housing and creating jobs primarily for low- and moderate-income people and places...will restore funding for the CDBG program."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:Under the Bush Administration, the Community Development Block Grant (CDBG) program faced an uncertain future. Some members of Congress had thoughts of holding sustained funding in abeyance and making future funding contingent upon mandated reforms and proof that the taxpayers dollars were reaping the intended results.

As part of the Community Planning and Development (CPD) Program, the CDBG Program is the largest community and economic development program in the U.S. Government, reaching an estimated 7,000 local governments annually. It assists urban, suburban and rural communities to improve housing and living conditions, expands economic opportunities for low and moderate income persons, helps to create jobs through the expansion and retention of businesses, and helps local governments tackle serious challenges facing their communities. Counties use the flexibility of CDBG funds to partner with private and non-profit sectors to develop and upgrade local housing, water and infrastructure projects and human services programs.

The annual appropriation for CDBG formula funding is split so that 70% is allocated among entitlement cities and counties and 30% among the states. See Promise HU-6 above for CDBG funding levels.

President Obama requested and received sustained funding and kept the CDBG program alive by proposing adequate levels of funding in light of severe budget constraints during his two terms in office.

This promise was fulfilled.
HU-8The Promise: "I'll put a three-month moratorium on foreclosures so that we give homeowners the breathing room they need to get back on their feet."
When/Where: Campaign Speech, Richmond, VA, 10/22/08.
Status:While some states (i.e. California) voluntarily applied the proposed 90-day moratorium, Obama failed to make the promised moratorium a national commitment.

In 09/10, tens of thousands of eviction applications were issued by "robosigners" without their accuracy being verified. Individual states (Texas, Connecticut, California, Colorado) moved quickly to institute their own foreclosure moratoriums, while the Bank of America announced on 10/07/10 that it would halt foreclosures nationwide due to reports of mortgage document mishandling.

On 10/10/10, White House Senior Advisor David Axelrod announced that the Obama Administration did not favor a national moratorium on foreclosures, stating that foreclosures where documentation was neither inaccurate nor fraudulent should proceed.

This promise was not fulfilled.
HU-9The Promise: "...Chapter 13 law prohibits bankruptcy judges from modifying the original terms of home mortgages for ordinary families, regardless of whether the loan was predatory or unfair or is otherwise unaffordable...will repeal this provision so that ordinary families can also get relief that bankruptcy laws were intended to provide."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity", dated 09/11/08.
Status:Bankruptcy Law is contained in Title 11 of the United States Code. Congress passed the Bankruptcy Code under its constitutional grant of authority to "establish... uniform laws on the subject of bankruptcy throughout the United States." Its codification occurred with the enactment of the "Bankruptcy Law of 1800."

Chapter 13 of the Bankruptcy Law permits the discharge of some debts, as well as the repayment of others over a period of three to five years. It may also permit either a reduction in principal owed on secured debts or the elimination of these debts altogether. It can also be used to structure a repayment plan for debts that cannot be settled in bankruptcy.

On 05/20/09, President Obama signed the "Helping Families Save Their Homes Act of 2009" (S. 896). One of the original intents of this law was to allow bankruptcy judges to modify mortgages on primary residences. However, the Democrat-controlled Senate deleted this "cram down" provision from the above law.

On 12/11/09, the Democrat-controlled House voted against Amendment #534 to H.R. 4173 (188 for, 241 against) that would have permitted foreclosure-prone house owners to extend repayment periods, reduce excessive interest rates and fees, and adjust the principal balance of the mortgage to a home's fair market value as necessary to prevent foreclosure. It would further have permitted the Veterans Administration (VA) and Federal Housing Administration (FHA) and others to take steps to facilitate mortgage modifications.

On 02/01/12, President Obama called on Congress to support a new mortgage refinancing plan that would make it easier for homeowners whose mortgages are higher than their homes are worth to refinance their mortgages at lower interest rates. The Home Affordable Refinance Program (HARP 2.0) went into effect on 03/17/12 and permits homeowners to refinance their mortgages without paying down principal.

To improve upon HARP 2.0, which lacked sustainability, President Obama proposed HARP 3.0 on 01/24/12 which would have further expanded the mortgage refinancing process to homeowners whose mortgages were non-Fannie Mae or non-Freddie Mac and other eligibility criteria. The "Responsible Homeowners Refinancing Act of 2012" (S.3085) introduced by Senator Robert Menendez (D-NJ) on 05/10/12, could have codified provisions of HARP 3.0, but this bill died with the 112th Congress at the end of CY2012. This bill was reintroduced by Senator Menendez on 02/17/13 as the "Responsible Homeowner Refinancing Act of 2013" (S. 249). It died with the 113th Congress at the end of CY2014.

The expiration date for HARP 2.0 was 09/30/17. If HARP 3.0 had been signed into law by that date, the new program would have had no cutoff date and would not have limited borrowers to a single use. However, HARP 3.0 would have only serviced loans held by Fannie Mae and Freddie Mac. Underwater homeowners with non-Government-Sponsored Enterprise (GSE) held loans would still have lacked an alternative to refinance out of their high interest loans.

Chapter 13 of the "Bankruptcy Law of 1800" has not been repealed, nor has it been amended since 04/05.

This promise was not fulfilled.
HU-10The Promise: "Obama will create a Foreclosure Prevention Fund to help people facing foreclosure stay in their homes and renegotiate with their lenders or sell their homes."
When/Where: Obama-Biden Plan: Protecting Homeownership and Cracking Down on Mortgage Fraud, dated 01/13/08.
Status:Created under President George W. Bush on 10/03/08, the "Troubled Assets Relief Program" (TARP) could have served to fulfill this promise. TARP was originally authorized at the $700B level but was reduced under President Obama to $475B by Congress under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 07/21/10, against which $426.4B was disbursed. TARP funding expired on 10/01/10 reportedly because the fund failed to live up to expectations, one of which was to mitigate foreclosures in the wake of the CY2008 financial crisis.

During the Obama Administration, the nation continued to experience high foreclosure filings. A breakout of the number of filings by year follows, with improvements noted in CY2012 and subsequent years:

A "Foreclosure Prevention Fund" at the national level was not created under President Obama.

This promise was not fulfilled.
HU-11The Promise: "...will make stabilizing our housing crisis a top priority..."
When/Where: Obama-Biden Plan: "Supporting Urban Prosperity," dated 09/11/08.
Status:Housing prices peaked in early CY2006 and started to decline in late CY2006 and CY2007. It simply became more difficult for borrowers to refinance their loans. As adjustable-rate mortgages began to reset at higher interest rates (causing higher monthly payments), mortgage delinquencies soared, peaking by CY2012. Securities backed with mortgages, including subprime mortgages, lost most of their value. Global investors reduced purchases of mortgage-backed debt and other securities as part of a decline in the capacity of the private financial system to support lending. A tightening of credit around the world and slowing economic growth in the USA and Europe ensued. The credit crisis resulting from this bursting of the housing bubble was a major cause of the credit default swap bubble of the CY2008 recession.

From the outset, the Obama Administration accorded top priority to stabilize the housing market and provide security for homeowners. To achieve these goals, the Administration developed a broad approach implementing state and local housing agency initiatives, tax credits for homebuyers, neighborhood stabilization and community development programs, mortgage modifications and refinancing, housing counseling, continued Federal Housing Administration (FHA) engagement, support for Fannie Mae and Freddie Max and increased consumer protections. In addition, Federal Reserve and Department of Treasury mortgage-backed securities purchase programs helped to keep mortgage interest rates at record lows.

This promise was fulfilled.
Housing & Urban Dev GPA0.45