Thursday, April 10, 2008

Pete Visclosky on Indiana having the 10 highest rate of foreclosure

Problems in the subprime mortgage markets have pushed the housing market into its worst slump in 16 years. As many as 2 million Americans will see their mortgage rates increase in the next two years, with many of them losing their homes as a result of bad lending practices. In Indiana, we already have the 10th highest rate of foreclosure in the country. As a result of the overall housing slump, tens of millions of homeowners could see the value of their home—their primary investment—drop by large amounts.

There are those who argue that this housing crisis is a natural business cycle and the thing to do is to wait it out. However, I believe that, after a prolonged period of deceptive business practices, poor regulation, and misguided consumer behavior, the market is severely skewed and cannot be expected to naturally correct itself. Therefore, I contend that we must take action to set the housing industry, and the economy as a whole, back on track.

That is why I have been working closely with my colleagues in the House of Representatives to dampen the effects of the housing crisis and help people stay in their homes. I want to expand affordable mortgage loan opportunities for families at risk of foreclosure and strengthen consumer protections against risky loans.

I supported H.R. 1852, the Expanding American Homeownership Act. The measure would allow subprime borrowers to avoid foreclosure through government-backed refinancing, would authorize zero-down and lower-down payments on FHA loans for homebuyers who could not otherwise make the down payment required under FHA rules, and would direct the FHA to underwrite borrowers with higher credit risk than the FHA currently serves to keep people from being driven to the subprime loan market.

I also supported H.R. 1427, the Federal Housing Finance Reform Act. The measure would create a Federal Housing Finance Agency to regulate Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, or Government Sponsored Entities (GSEs).

In November, 2007, I voted for H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act, which aims to reduce predatory mortgage lending practices by establishing minimum standards for mortgages such as ensuring that borrowers can repay loans and full disclosure of all terms by the lender. The bill also would require mortgage originators to be licensed and registered under state or federal law.

I voted for the Recovery Rebate and Economic Stimulus for the American People Act which, among other provisions to boost our economy, expands financing opportunities for Americans in danger of losing their homes because of the mortgage crisis, thereby increasing affordable refinancing opportunities and liquidity in the housing market.

At present, the Senate is considering its own comprehensive housing legislation. The Senate’s measure would increase Federal Housing Administration loan limits and establish tax breaks for the housing sector. While the Senate measure includes provisions from the measures already approved by the House, remaining differences will need to be reconciled in a House-Senate conference.

Although we have already taken significant steps to fix the housing crisis, more action is needed. Congressman Barney Frank, Chairman of the House Financial Services Committee, is working on comprehensive legislation that would provide at least $10 billion in loans to states to address the foreclosure crisis and expand the FHA loan program to offer guarantees to refinance at-risk borrowers into viable mortgages.


Pete Visclosky
Member of Congress

Do you think all this talk is going to solve the problems at hand? I don't

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