Foreclosure rates are now approaching levels not seen since the Great Depression and Florida families are hurting. Florida currently 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.
In 2008, Broward County had the nation's sixth-highest foreclosure rate, with one in 17 homes in some stage of distress. Mortgage foreclosures lay at the very heart of our financial crisis. Until we stop this bleeding, we cannot hope to stabilize the housing market and revive our economy.
Since the first of the year I've been talking with residents and community leaders about the problems they are facing, the assistance they need, and what I've been doing in Washington to help South Floridians. A common theme has resonated- I heard it at my January Town Hall Meeting in Miami Beach, our telephone Town Hall Meeting in February, and my meeting in Dania Beach with local community officials. People are anxious about the state of the economy today, and their families' ability to survive in the coming months.
Back in Washington, I've been working with my colleagues in Congress and President Obama to restore confidence in the American financial system and help families stay in their homes.
Earlier this month, President Obama announced his plan to help between seven and nine million families restructure or refinance their mortgages to avoid foreclosure. I was one of 19 original co-sponsors of this critical piece of legislation in the U.S. House of Representatives, which includes key incentives to encourage lenders to renegotiate affordable mortgages for homeowners who are underwater, at risk of foreclosure, and those nearing bankruptcy.
This legislation is about more than just shoring up our economy - it's about helping hard working Americans hold on to the American Dream.
Foreclosures uproot families and decimate communities. Vacant homes blight our neighborhoods and depress all our property values.
To get more families into affordable mortgages, the bill fixes the Hope for Homeowners program designed to spur the refinancing of mortgages, by reducing current fees that have discouraged lenders from voluntarily participating and offering new incentives for lenders to negotiate loans.
To prevent foreclosures, the bill protects lenders from lawsuits for modifying loans so that reasonable loan modifications can be available to many homeowners at risk of foreclosure.
To push lenders into helping families who have run out of options, the bill allows bankruptcy judges to modify the terms of the loan for existing mortgages, as investors in vacation homes, real estate speculators, corporations, and family farmers are currently able to do. This common-sense, practical approach will not cost taxpayers a dime, and we are hopeful that this change will reduce foreclosures by 20 percent.
Now why is this necessary? To put it simply, we all stand to lose if we do not stop the steep decline in home prices.
Stabilizing the housing market is central to restoring the American economy.
Since January, more than 4,200 Florida families have lost their homes.
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 could make their mortgage payments, but they have lost their job or their income dropped. Others were victims of predatory lending practices by banks and are now stuck with unaffordable subprime mortgages, and are in danger of losing their home, through no fault of their own.
The Helping Families Save Their Homes Act is a win-win. It will allow families to remain in their homes and avoid foreclosure, and protect lenders who work with homeowners to keep them in their homes.