NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007 -- (Senate - April 10, 2008)
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Mr. KOHL. Mr. President, today the Senate threw a lifeline to homeowners facing the specter of foreclosure. This legislation includes valuable resources for communities, homeowners, and industry to combat the downturn in the housing market.
In my home State of Wisconsin, foreclosures have risen at an alarming rate. Compared to last year, foreclosures have increased by 145 percent. Many of these foreclosed properties were connected with subprime loans with adjusting interest rates. A combination of lax lending standards and the creation of exotic financial products gave lenders the ability to offer people who would not qualify before the chance to own a home. However, there was little concern on whether or not the person or family would be able to sustain home ownership. Because of the irresponsibility of some lenders, families across the country have lost their homes and more are soon to follow if help does not come.
One of the provisions included in the Foreclosure Prevention Act increases funds for housing counseling services. These nonprofit housing counseling agencies help homeowners connect to their lenders and renegotiate terms that will allow them to keep their homes. The money is estimated to help close to 500,000 families stay in their homes. Another very important provision provides $4 billion in community development block grant for communities to purchase and redevelop foreclosed-upon properties. This will enable localities to purchase unoccupied properties which drag down neighboring home prices and are easy targets for criminal activity. By rehabilitating these blights, communities will be able to prevent further loss of property value while at the same time providing affordable housing units. Other important provisions include providing a temporary tax refund to help struggling businesses stay afloat and including reforms to the Federal Housing Administration to make it easier for low- and moderate-income families utilize the home ownership programs.
The housing crisis has shed light on the complexity and problems in our Nation's lending system. Many homeowners were rushed through the process without truly understanding the terms and conditions of their loans. The Foreclosure Prevention Act will amend the Truth in Lending Act to require lenders to fully disclose the terms and conditions of the loan and to provide the home buyer with the maximum loan payment they will have to make. This simple change will enable future home buyers to make informed decisions regarding their mortgage and enable them to plan accordingly.
While this bill is not the final answer to the housing crisis, it is a step in the right direction. There are still many issues that need to be resolved in order to avoid a similar housing and economic downturn. We must consider revising lending standards to protect future home buyers, increasing our affordable rental housing stock and ensuring we create sound fiscal policies that promote the economic well-being of each and every American.
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