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Sub-prime Crisis

This has been a tough year for middle-class home owners and the economy. The mortgage collapse has sent shockwaves through the rest of the economy. Several million households nationwide face foreclosure with almost 180,000 homes at risk in California and the local impact is devastating. Foreclosures in Solano County and Contra Costa County have become a great cause of concern.

Protecting middle class families in a struggling economy has been the Democratic Congress’s highest priority and in the past few months the House of Representatives has passed several bills to help turn around the mortgage crisis as quickly as possible.

On February 13th the President signed into law the Economic Stimulus bill to help reinvigorate the economy. Along with providing tax rebates to individuals and small business, the legislation will provide help to homeowners seeking to avoid foreclosure. It increases loan limits for single-family houses from Fannie Mae and Freddie Mac from $417,000 to $729,750 for 2008, which will enable qualified homeowners with larger mortgages to refinance their mortgages, lower their monthly payments, and avoid foreclosure. In Contra Costa County, CA, where I live and which I am proud to represent in Congress, the median home price in 2006 was more than $640,000. In Solano County, which I also am proud to represent in Congress, the price was nearly $490,000. Both prices are well above the current $417,000 limit. So, the change our bill makes will provide critical help to untold numbers of families in my district and around the country who are struggling to hold onto their homes.

One of the most important bills to address the sub-prime crisis passed the House in November. H.R. 3915, the "The Mortgage Reform and Anti-Predatory Lending Act of 2007" will give homeowners more refinancing options and address predatory lending. This comprehensive anti-predatory lending legislation will help stop these bad loans from being made in the first place -- making sure that consumers get mortgages they can really afford, strengthening consumer protections against reckless and abusive lending practices, requiring licensing and registration for brokers and bank loan officers, and for the first time bring accountability to the secondary market for home loans by making participants liable for ensuring responsible lending.

The House has taken the lead in Congress to address the mortgage crisis. Now, we need the Senate to act quickly on the mortgage reform issue so these important provisions can become law.

In September, the House passed H.R. 1852, the Expanding American Homeownership Act of 2007 (the FHA bill), which will revitalize the Federal Housing Administration (FHA), the federally insured loan program, and will enable FHA to serve more sub-prime borrowers at affordable rates and terms. The Senate has passed its own version of the bill, which will soon head to conference.

We have begun to make progress towards helping homeowners facing foreclosures, but our work is not done and Democrats will continue to fight for a stronger economy, reduce the impact of the mortgage crisis and give more Americans a chance to succeed.

districtmatters economy foreclosure housing mortgage crisis predatory lending subprime

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Sub-prime Crisis

This has been a tough year for middle-class home owners and the economy. The mortgage collapse has sent shockwaves through the rest of the economy. Several million households nationwide face foreclosure with almost 180,000 homes at risk in California and the local impact is devastating. Foreclosures in Solano County and Contra Costa County have become a great cause of concern.

Protecting middle class families in a struggling economy has been the Democratic Congress’s highest priority and in the past few months the House of Representatives has passed several bills to help turn around the mortgage crisis as quickly as possible.

On February 13th the President signed into law the Economic Stimulus bill to help reinvigorate the economy. Along with providing tax rebates to individuals and small business, the legislation will provide help to homeowners seeking to avoid foreclosure. It increases loan limits for single-family houses from Fannie Mae and Freddie Mac from $417,000 to $729,750 for 2008, which will enable qualified homeowners with larger mortgages to refinance their mortgages, lower their monthly payments, and avoid foreclosure. In Contra Costa County, CA, where I live and which I am proud to represent in Congress, the median home price in 2006 was more than $640,000. In Solano County, which I also am proud to represent in Congress, the price was nearly $490,000. Both prices are well above the current $417,000 limit. So, the change our bill makes will provide critical help to untold numbers of families in my district and around the country who are struggling to hold onto their homes.

One of the most important bills to address the sub-prime crisis passed the House in November. H.R. 3915, the "The Mortgage Reform and Anti-Predatory Lending Act of 2007" will give homeowners more refinancing options and address predatory lending. This comprehensive anti-predatory lending legislation will help stop these bad loans from being made in the first place -- making sure that consumers get mortgages they can really afford, strengthening consumer protections against reckless and abusive lending practices, requiring licensing and registration for brokers and bank loan officers, and for the first time bring accountability to the secondary market for home loans by making participants liable for ensuring responsible lending.

The House has taken the lead in Congress to address the mortgage crisis. Now, we need the Senate to act quickly on the mortgage reform issue so these important provisions can become law.

In September, the House passed H.R. 1852, the Expanding American Homeownership Act of 2007 (the FHA bill), which will revitalize the Federal Housing Administration (FHA), the federally insured loan program, and will enable FHA to serve more sub-prime borrowers at affordable rates and terms. The Senate has passed its own version of the bill, which will soon head to conference.

We have begun to make progress towards helping homeowners facing foreclosures, but our work is not done and Democrats will continue to fight for a stronger economy, reduce the impact of the mortgage crisis and give more Americans a chance to succeed.

ASK FOR HELP!
Studies show that more than half of homeowners do not seek help when they begin to fall behind on payments, but those who do seek help in the early stages of delinquency are more likely to avoid foreclosure. These organizations offer free or low cost foreclosure prevention programs to eligible homeowners.
Home Ownership Preservation Foundation	1-888-995-HOPE
Neighborhood Housing Services	(510) 237-6459
Department of Housing and Urban Development (HUD)	1-800-569-4287