Schiff is deeply concerned about the current housing crisis and believes that we must find a way to better inform future homebuyers of the risks involved with certain loans and prevent current homeowners from facing foreclosure. Families around the country, and especially in California, are being hard hit by the current housing crisis.
Compared to the rest of the nation, California still has high property values, but foreclosures will cost Californians a total of $67 billion in lost property values, an average individual loss of more than $8,000 and the state ranks 4th highest in the number of foreclosures. The problems surrounding the subprime mortgage markets have pushed the housing market into its worst slump in 16 years -- weakening the American economy and making American families less secure.
This is why Schiff supported the Helping Families Save Their Home Act (H.R. 1106) which strengthens the country's housing market. The bill makes crucial changes to the HOPE for Homeowners Program to encourage more lenders to participate in this program that has helped keep millions in their homes. The legislation strengthens the mortgage insurance market by restricting predatory lending firms from participating in the Federal Housing Authority's mortgage insurance programs.
The House version of the legislation allowed for judicial modification of the mortgage terms involving primary residences. Homeowners facing foreclosure would have been required to attempt to notify the lender and work out a loan modification before applying for judicial modification. Bankruptcy judges could have extended an applying homeowner's mortgage repayment period and reduced exorbitant mortgages interest rates to keep the mortgage affordable over the long-term. This is the same power bankruptcy judges have for all other types of debt. Unfortunately this provision was not included in the final version of the bill, which was signed into law on May 20, 2009.
In 2009, Schiff supported legislation to make it easier for homeowners to refinance. The American Housing Rescue & Foreclosure Prevention Act (H.R. 3221) which improved upon the FHA program so many borrowers in danger of losing their primary residence can refinance into lower-cost government -insured mortgages they can afford to repay. It also strengthens regulation of Fannie Mae and Freddie Mac and raises the loan limits so families can more easily purchase single family homes in high cost areas, such as California.