Issue Position: Housing

Issue Position

Issue Position: Housing

Housing

For most families in Ohio, their home provides a lot more than just shelter. Homes are full of family memories, and in many cases, a substantial share of a family's savings as well. Stable, affordable housing is one of the keys to good neighborhoods, schools, and communities in which to live and work.

The crisis in sub-prime lending has drawn national attention now that it has caused record losses on Wall Street. But on Main Streets throughout Ohio, it has been clear for a long time that the housing boom rested on a poorly laid foundation. Few if any states have been hit as hard or as long as Ohio.

Predatory Lending

As soon as I joined the Senate Committee on Banking two years ago I started pushing federal regulators to use their authority to shut down predatory lending. At the end of the year, the Federal Reserve finally issued regulations for comment which became final this year.

But more needs to be done. I joined Senators Schumer and Casey last year in introducing the Borrowers Protection Act, S. 1299, which would establish federal standards for mortgage brokers and lenders and protect homeowners from unfair mortgage practices. In December, I joined Senator Dodd in similar legislation that would establish even broader protections.

Helping Homeowners Keep Their Homes

It used to be that you took out a mortgage with your local bank. The bank had almost as much interest in your ability to repay the loan as you did. But times have changed. As almost anybody who has tried to deal with a mortgage company knows, the voice on the other end of the phone call is more likely to be halfway around the world than at your downtown branch.

That's why I have pushed so hard for additional funds for local non-profit housing counselors to help people navigate the mortgage maze. Many homeowners who are struggling to pay unaffordable mortgages could keep their homes if they had a stable mortgage payment at a reasonable rate. This effort paid off at the end of the year when the omnibus appropriations bill enacted in December contained $180 million for counseling, including $50 million to be immediately distributed to Ohio and other hard-hit areas.

Also in December, the Senate passed legislation introduced by Senator Stabenow and cosponsored by Senators Voinovich and me that would amend the Internal Revenue Code to exclude mortgage loan forgiveness from income. The House companion to this bill, H.R. 3648, was signed into law in December.

Overhauling Federal Housing Programs

In September of last year, my colleagues on the Banking Committee and I fashioned legislation, the FHA Modernization Act of 2007, that would streamline the Federal Housing Administration mortgage process, increase loan limits, and reduce down payment requirements so that more people will take out FHA loans rather than unfair subprime loans. Following repeated objections to its consideration from the minority, it was finally adopted by the full Senate on December 14 by a vote of 93-1.

I also joined Senator Reid this February in sponsoring the Foreclosure Prevention Act, which would provide $4 billion in community development funds for rehabilitating or razing abandoned homes. The legislation would also provide an additional $180 million in counseling funds, and an additional $10 billion in borrowing authority for housing finance agencies. This legislation, too, faced repeated procedural delays, as the minority blocked its consideration and the Bush Administration threatened to veto it.

At long last, this summer these two bills were combined with legislation to overhaul the regulation of Fannie Mae and Freddie Mac and provisions that would permit as many as 400,000 families to refinance their home loans into affordable mortgages. The Bush Administration finally dropped its veto threat, and the bill was signed into law. Funds to help rebuild Ohio's communities should begin to be distributed by the end of September.

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