Housing Crisis

In these challenging economic times, we must do all we can to keep people in their homes, especially those homeowners who are doing all they can to responsibly pay their mortgages on time. Nevada has the highest percentage of underwater mortgages of any state in the country and has one of the highest rates of foreclosure.

Upside down loan-to-value ratios combined with stagnant credit and housing markets have exacerbated this problem. We must assist distressed Nevadan homeowners with sensible mortgage refinancing reform, but we must do so in a way that avoids disturbing an already fragile housing market.

In February, the President announced a $26 billion settlement reached with mortgage servicers who engaged in abusive foreclosure and mortgage servicing practices. This settlement would provide $10 billion for loan principal reductions, $3 billion to help underwater borrowers refinance into cheaper loans, $7 billion for payment forbearance for unemployed borrowers and other forms of relief, and $5 billion in payments to sates.  Unfortunately, I do not believe this agreement or the President's other proposals will solve the housing crisis.

Federal programs to promote mortgage refinance have been tremendously unsuccessful. Of the funds set aside for the "Hardest Hit Fund," less than 3 percent of the total appropriated has been used, according to the special inspector general overseeing the funds. 

The inspector general reports that only 30, 640 homeowners total have been helped in the last two years, due to a lack of planning and management by the Treasury Department and limited participation by lenders. Further, the federal Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP), also under the management of the Treasury Department, have helped a quarter of the homeowners they were intended to assist.

In an attempt to improve the mortgage refinancing process, the House has passed several bills this session that would return control of this process to the private market and give lenders flexibility to set eligibility conditions and refinancing terms that favor responsible homeowners, including H.R. 830, the FHA Refinance Program Termination Act, H.R. 836, the Emergency Mortgage Relief Program Termination Act, and H.R. 839, the HAMP Termination Act of 2011. I believe private market solutions, so long as they respect federal law, are the best approach to resolving this housing crisis.

Although these bills have been proposed as a possible solution to underwater mortgages, the underlying problem we must tackle is our poor economy. One major reason Nevada has the highest foreclosure rate in the country is because we also have the highest unemployment rate. For the housing market to recover, we must create jobs and resolve our nation's fiscal crisis. I believe the key to stimulating the housing market is getting Nevadans back to work, not imposing more federal programs and regulations. The House of Representatives has passed 27 job-creating bills this session that still await action in the Senate. Congress must work together on creating jobs and spurring economic growth in order to raise demand and prices for homes, thereby helping Americans who are struggling in this housing market.

Cosponsored:

• H.R. 1755, the Home Construction Lending Regulatory Improvement Act

• H. Res. 25, sense of Congress that deduction for interest paid on mortgage-secured debt should not be further restricted

If you need further assistance with your refinancing or would like information about how to file a complaint regarding your mortgage underwriting process, please contact Elyse Monroy, my Housing and Urban Development constituent caseworker, in my Reno district office at 775-686-5760.  She would be happy to discuss your situation with you and to provide appropriate guidance

Many of the programs enacted under HUD helped lead to the foreclosure crisis. Even more problematic, the programs enacted to "fix" the crisis have made the situation even worse for most Nevadans. Obviously, this is a bureaucracy that is not working. 

Homeowner Resources