Kerry: Republicans Block Mortgage Help for Massachusetts Families
Kerry-Smith provision will help keep low-income families in their homes
Senator John Kerry expressed strong disappointment today when Senate Republicans blocked progress on legislation designed to stem foreclosures and address the housing crisis in America. Kerry vowed to continue his efforts to keep families in their homes and ease the skyrocketing rate of foreclosure across the country. Kerry urged the Senate Finance Committee to keep pursuing the goals of their proposal to address the subprime mortgage crisis. Roughly 2.5 million mortgages were in default in the third quarter of 2007 - a 40 percent increase from 2005.
In 2008, Massachusetts is again on a pace to have a record number of foreclosures. In 2007, mortgage companies foreclosed on more than 7,500 homes in Massachusetts, almost nine times the number in 2005 and almost three times the number in 2006. The foreclosure rates of five Massachusetts metro areas rank in the nation's top 100 - Worcester (#35), Springfield (#47), Essex County (#53), Boston/Quincy (#59) and Cambridge/Newton/Framingham (#65).
"This legislation would provide targeted relief to families who need it most, and we must not allow Republican obstruction to stop the Senate from acting on common sense," said John Kerry. "This is a critical moment for families who may soon lose their homes, and Washington needs to be part of finding solutions that will help people avoid foreclosure. In spite of today's roadblock, we will keep pushing until this bill is enacted into law and help is on the way."
Senator Kerry and Senator Gordon Smith began working on a bill in December to stop the spread of foreclosures by providing options to obtain safe, fair mortgages. Under current law, state and local governments may issue bonds to finance new mortgage loans to first-time homebuyers. The Kerry- Smith provision would temporarily expand the use of this program to include refinancing of subprime loans.
According to a recent report by the Joint Economic Committee, the number of subprime foreclosures in Oregon will total 12,600 by the end of 2009. Mortgages in delinquency in Oregon rose by nearly 50 percent between 2005 and the end of 2007. Nationwide, it is estimated that Smith's proposal would lead to roughly 80,000 fair, secure, new loans according to the National Council of State Housing Agencies.
Dr. David Seiders, Chief Economist of the National Association of Home Builders, spoke favorably of the Kerry- Smith provision at today's Finance Committee hearing. The Finance Committee passed the provision last month with overwhelming bipartisan support as part of the economic stimulus package, though it was not included in the package that was signed into law.