Schumer signs on to the Baker-Samwick own-to-rent proposal

By Felix Salmon
July 16, 2009

Great news: Chuck Schumer has signed on to the Baker-Samwick proposal which would allow people living in foreclosed-upon homes to be able to continue renting at the market rate.

Andrew Samwick has revisited the idea, giving full credit to Dean Baker for having the idea in the first place. But I like to call it the Baker-Samwick proposal because Samwick is a conservative economist and his support shows that this proposal can and should have bipartisan support. Says Samwick:

It’s hard to justify why struggling homeowners should get such ungenerous treatment (formerly, a point of pride in the plan) when other entities (AIG’s creditors) have gotten better much better treatment.

Samwick also notes that a bill has already been introduced in the House:

Rep. Raúl M. Grijalva today introduced H.R. 6116, the Saving Family Homes Act of 2008.

The Act would grant homeowners whose mortgages have been foreclosed the right to petition a judge to allow them to remain in the home as renters, and pay a fair market rent. The rent would be set by a court-appointed appraiser and adjusted annually for inflation.

The Saving Family Homes Act is one of the few proposed remedies for the current mortgage crisis which requires no expenditure of federal funds or additional bureaucracy, while giving immediate relief to millions of families facing foreclosure and preventing home vacancies that harm neighborhoods.

I would like to see the Grijalva bill expanded significantly — for one thing it shouldn’t require case-by-case judicial approval, and for another thing it should apply to renters of foreclosed homes as well as owner-occupiers. But it looks like there’s some serious momentum now, and I’m also hearing that there’s been a good amount of groundwork for this proposal put down by the pointyheads at Fannie Mae. Let’s make it happen!

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