Contact: Nathan Britton, Boxer, 202/224-8120

Scott Gerber or Phil LaVelle, Feinstein, 202/224-9629

 

FOR IMMEDIATE RELEASE:                                                   

Friday, September 26, 2008                                                  

                                                 

                                                                                                                                                                                                              

SENATORS BOXER AND FEINSTEIN EXPRESS DISAPPOINTMENT IN CALIFORNIA’S SHARE OF HUD FORECLOSURE GRANTS, URGE MORE FEDERAL AID

-California shortchanged as foreclosures in state soar past half-million mark-

 

Washington, DC – U.S. Senators Barbara Boxer and Dianne Feinstein (both D-CA) today expressed deep disappointment with the Department of Housing and Urban Development’s allocation of foreclosure grants to California.

 

Under the agency’s allocation announced today, California will receive less federal assistance than Florida, despite having 274,013 more foreclosure filings so far this year, according to RealtyTrac. California will receive $529 million, approximately 13 percent of the total funds, despite accounting for more than 25 percent of all foreclosures nationwide.

“This makes no sense, and is totally unacceptable,” Senators Boxer and Feinstein wrote in a letter to HUD Secretary Steve Preston.

So far this year, 561,223 foreclosures have been filed in California, and the state is on pace to see more than 841,000 foreclosure filings this year.

 

Eight of the 10 metropolitan areas with the highest foreclosure rates in the nation are in California, and entire neighborhoods are being decimated in the hardest hit areas of the state. This includes Stockton, which has been referred to as America’s foreclosure capital, where one in 25 homes is in foreclosure.

Following is the text of their letter:

 

September 26, 2008

 

 

The Honorable Steve Preston

Secretary

U.S. Department of Housing and Urban Development

451 7th Street, SW
Washington, D.C. 20410

 

Dear Secretary Preston:

 

We write to express our deep disappointment with the funding allocations announced today for the $3.9 billion in Community Development Block Grants (CDBG) under the Housing and Economic Recovery Act of 2008 to states and localities to redevelop foreclosed and abandoned properties, and to combat blight in neighborhoods. 

 

Frankly, it is beyond us how California – which has nearly twice the amount of foreclosure filings than Florida (561,223 compared to 287,210) – could receive less assistance. This makes no sense, and is totally unacceptable.

 

California ranks at or near the top of all categories used in determining the CDBG allocations under the Act: number and percentage of foreclosed homes in each state or locality, and number and percentage of subprime mortgages and mortgage default and delinquencies.

 

California is the most populous state in the nation, and it is bearing the brunt of the foreclosure crisis. Foreclosures are accelerating at an alarming rate, and our state accounts for more than 25 percent of all foreclosures in the Nation.  The foreclosure rate in California is roughly three times the national average, with 1 foreclosure filing for every 130 households in the state last month.  There have now been over 561,223 foreclosures filed in California in 2008. At this rate, more than 840,000 foreclosures will be filed in our state this year.

 

Entire neighborhoods in several of our cities, such as Stockton, are being decimated, and this crisis poses a serious threat to the state’s economy. More federal help is urgently needed, and we request that a detailed explanation of how the funding allocations were determined be provided to us as soon as possible.

 

 

 

                      Sincerely,

 

                                Dianne Feinstein                               Barbara Boxer

                               United States Senator                        United States Senator

 

 

 

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