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Uncle Sam cracks down: Consumer privacy, Do-Not-Call violators hit for non-compliance

National Mortgage Professional
May 12, 2005

Down payment assistance cut as home prices soarmortgagepress.comhousing market, OFHEO budget, down payment assistance Congress has passed the $388 billion omnibus appropriations bill, which includes additional funding for the Office of Federal Housing Enterprise Oversight (OFHEO) but cuts funding for the president's signature housing initiative--the American Dream Down Payment Assistance program, which is designed to help 40,000 low-income families by reducing down payment requirements by an average of $5,000. OFHEO received nearly a 50 percent increase in its budget, to $59.2 million, as requested by the Bush administration. However, the president's request for $200 million for his down payment assistance program was cut to $50 million, a 75 percent decrease. Citing budget pressures, House appropriators originally proposed to cut the program to $85 million; however, Senate appropriators expressed concerns about the viability of the new program, which is supposed to help low-income renters become homeowners. The program "may be helping families with excessive credit risk and who may not be the best candidates for homeownership," says a Senate committee report on the U.S. Department of Housing and Urban Development appropriations bill. The Senate appropriators also noted that HUD, whose budget was cut by $618 million to $37.3 billion, probably couldn't distribute more than $50 million to the states even if Congress provided more funding for the down payment assistance program. In the final negotiations, House appropriators went along with the budget cut. These budget cuts occur as home prices record the fastest appreciation rate in 25 years. Home prices increased by an annualized rate of 18.5 percent in the third quarter, according to new figures released by OFHEO. "The appreciation reflected in this quarter's report show further acceleration from already rapid increases," said OFHEO Director Armando Falcon Jr. The agency added that the price increase is particularly steep when compared with the price of non-housing goods and services. The states with the highest appreciation were: Nevada (36 percent), Hawaii (28 percent), California (27 percent), District of Columbia (24 percent), Rhode Island (23 percent) and Maryland (22 percent). Seventeen of the 20 metropolitan statistical areas with the largest price gains are in California. For more information, visit www.hud.gov.
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