Keep Americans Out of Foreclosure and In Their Homes
Rep. Wasserman Schultz co-sponsors key legislation, outlined by the President, that allows modification of the terms of home mortgages
Rep. Wasserman Schultz, who is one of 19 original co-sponsors of key anti-foreclosure legislation, praised the House of Representatives' passage of the Helping Families Save Their Homes Act of 2009 (H.R. 1106) today. The Helping Families Save Their Homes Act will put in place a key first piece of President Obama's comprehensive Homeowner Affordability and Stability Plan. The President announced details of his plan yesterday, including a Web site, www.financialstability.gov , with an eligibility quiz for homeowners struggling to make their payments.
"Mortgage foreclosures lay at the very heart of our financial crisis," said Rep. Wasserman Schultz (FL-20). "Until we stop this bleeding, we cannot hope to stabilize the housing market and truly rescue our economy."
"This legislation is about more than just shoring up our economy - it's about helping hard working Americans hold on to the American Dream," said Rep. Wasserman Schultz. "Foreclosures uproot families and decimate communities. Vacant homes blight our neighborhoods and depress all our property values."
The Helping Families Save Their Homes Act seeks to help the estimated 7- 9 million households facing possible foreclosure by including key incentives that encourage lenders to renegotiate affordable mortgages for homeowners who are underwater, at risk of foreclosure, and those nearing bankruptcy.
Specifically, the bill fixes the Hope for Homeowners program, implemented October 1, 2008, which was designed to get more families into affordable mortgages by:
* reducing current fees that have discouraged lenders from voluntarily participating and
* offering new incentives for lenders to negotiate loans.
To further encourage participation in this program, the bill protects lenders from lawsuits for modifying loans. This will make reasonable loan modifications available to many more homeowners at risk of foreclosure.
To help families who have exhausted options for relief, the bill also allows bankruptcy judges to modify the terms of a loan for existing primary residence mortgages.
Currently, the mortgage for a primary residence cannot be modified in bankruptcyunlike every other secured debt - including debts secured by second homes, investment properties, luxury yachts, and private jets. .
"The Bankruptcy Code should be a safety net of last resort for families in distress," said Rep. Wasserman Schultz. "In this recession, excluding the family home makes no sense and fans the flames of foreclosure."
"In addition, this common-sense, practical approach will not cost taxpayers a dime, and could reduce foreclosures by 20 percent," said Rep. Wasserman Schultz.
Stabilizing the housing market is central to restoring the American economy. We all stand to lose if we do not stop the steep decline in home prices.
* Florida has the second-highest number of foreclosed homes in the country.
* Since January, more than 4,200 Florida families have lost their homes.
* Another 1.2 million Florida homeowners are "under water" - that is, they owe more than their homes are worth.
* One of every 214 Florida homes is in foreclosure.
* One of every 182 homes in Broward County is in foreclosure.
* Nationally, home prices dropped a record 18 percent in the last quarter of 2008.
* An estimated 14 million homeowners in the U.S. owe more than their home is worth and many cannot refinance into an affordable mortgage.
* Each foreclosed home in the U.S. reduces nearby property values by as much as 9 percent.
Some homebuyers were able to make their mortgage payments until they lost their job or their income dropped. Others were victims of predatory lending by banks and are now stuck with unaffordable subprime mortgages, in danger of losing their home, through no fault of their own.
Either way, these homeowners now face foreclosurea devastating event for a family and one that has negative implications for neighbors through depressed housing values, vacant homes, and a loss of tax revenue for local schools.
"The Helping Families Save Their Homes Act of 2009 is good for our economy and good for our communities," said Rep. Wasserman Schultz.