SACRAMEMENT, Calif., Aug. 4, 2022 (Newswire.com) – The California Senate Appropriations Committee A vote to approve Legislative Bill 1837 (author Mia Bonta, co-author Nancy Skinner) will take place on August 11th. ATTOM data shows her 12,800 foreclosures will start across California in the first half of 2022, up 219% from last year.
“This is likely an unintended consequence that the draftsmen did not see.” Andre Chappleboard member National Diversity Coalition and CEO African American Empowerment Coalition“Rather than lifting people out of poverty, the new bill will trap them in it.”
Background of issuance
Congressional Bill 1837 states:Housing for homeowners, not for corporationsprogram (Senate Bill 1079), which will take effect in 2021. Current law allows prospective homeowners and mission-oriented organizations a “final check” to purchase homes that are put up for foreclosure auctions that are typically purchased by corporations. The program is to recycle homes to owners and first-time homebuyers.
But proponents say the new bill does the exact opposite of encouraging homeownership, as it limits housing as “affordable housing” for at least 30 years. New homeowners of these properties still need to make a down payment, take out a mortgage, and pay for all home improvements. However, when trying to sell, the owner must sell the house for approximately the same price it was purchased for.
Sellers may even ‘submerge’ in order to keep properties ‘affordable’ for the next homeowner if the economy hits a recession and average wages fall (they have to pay money at closing). The average American moves 12 times in their lifetime, or about once every seven years.
The original press release on the subject can be read at:
according to Jack MirandaDirector and Executive Director of the National Diversity Coalition Jesse Miranda Center for Hispanic Leadership“They may be called homeowners, but the law basically turns these properties into rentals without the landlord replacing them when the furnace breaks.”
“While we appreciate the intent to keep homes affordable, we cannot put all the burden of solving California’s affordability crisis behind minority and low-income communities.”
The new law has loopholes. Prospective homeowners who can purchase a home with cash are not subject to the affordability limit. Foreclosure sales require the buyer to pay in full cash.
according to Federal Reserve BoardLatest of Consumer finance researchThe average American only has $5,300 in a bank account, but the average California home cost was $865,000 in June 2022, according to the. California Real Estate Association.