Housing

HELPING STRUGGLING HOMEOWNERS AND RESTORING HOMEOWNERSHIP

We must bring the alarming rate of foreclosures nationwide and in Sonoma and Marin counties to a halt.  As our nation experiences one of the worst economic downturns in generations, millions of families are facing home foreclosures or are unable to refinance into more affordable mortgages reflecting their homes’ current values.  Not only has this caused severe hardship for hardworking families, but it also has hurt the ability of our economy to recover. 

President Barack Obama created the Making Home Affordable program in February 2009 to help families about to lose their homes and to provide incentives to encourage lenders to negotiate more affordable mortgages.  Unfortunately, many families that have contacted their mortgage servicer to modify their mortgage or seek assistance have been rebuffed or worse, never reached their lender.  Too many financial institutions that benefitted from taxpayer-funded support are now ignoring the needs of distressed homeowners.  Sonoma and Marin counties especially are burdened by elevated real estate prices, with some of the highest median home prices in the United States.  For more information on this housing program, please click here or call 888-995-4673.  

That’s why I signed a letter to Attorney General Eric Holder, Federal Reserve Chairman Ben Bernanke, and acting Comptroller of the Currency John Walsh asking them to investigate possible violations of the law and regulations by financial institutions in their handling of delinquent mortgages, mortgage modifications, and foreclosures.  I also signed a letter to the Department of Housing and Urban Development (HUD) urging it to further encourage mortgage servicers to modify eligible troubled mortgages, provide greater responsiveness to homeowners seeking assistance, and expand the reach of existing homeowner assistance programs.  

It’s essential that distressed homeowners are aware fully of their rights and recourses when facing foreclosure or seeking loan modifications.  To help people stay in their homes, I held two foreclosure prevention seminars with the Federal Home Loan Bank which brought together homeowners, financial institutions, and government-approved counselors.  To view video footage from one of these seminars, please visit the following weblink: bit.ly/HLZAC5

You may be interested to know that HUD-approved housing counselors offer free or low-cost advice on mortgage and foreclosure issues.  For more information, you may want to call my office or find a HUD-approved counselor in your area at the following website: bit.ly/IgQxec or call 800-569-4287. 

I recognize the important role of mortgage professionals in making the dream of home ownership a reality, and I strongly believe we must stop the kind of predatory and irresponsible mortgage loan practices that played a major role in housing downturn.  As our economy begins to recover, we must take appropriate steps to bring common sense reform and consumer protection to mortgage lending.   

H.R. 4173, the Wall Street Reform and Consumer Protection Act, which passed Congress and was signed into law by President Barack Obama on July 21, 2010, took strong steps to reform mortgage lending practices and increase accountability in the housing markets.  Specifically, this law ensures that borrowers can repay their loans, that mortgage lenders make loans that benefit the consumer, and it prohibits lenders from steering borrowers into higher cost loans.  This law also establishes penalties for irresponsible lending, expands consumer protections for high-cost mortgages, and requires additional disclosure on mortgage terms. 

The recent decline in home prices in many communities in Marin and Sonoma counties has left some homeowners “underwater,” meaning that borrowers owe more on their homes than the houses are worth.  This limits families’ ability to sell their homes if they have to move and effectively traps homeowners in their current homes and mortgages because they cannot afford to sell their homes at a loss.  I support allowing bankruptcy courts and judges to adjust the principal balance of struggling homeowners’ mortgages to reflect their homes’ fair market value and voted for an amendment to H.R. 4173 that would have allowed bankruptcy courts to modify home mortgages, extend repayment periods, and reduce excessive interest rates and fees.  Unfortunately, this amendment failed by a vote of 188-241 during consideration of H.R. 4173.   

Finally, we should use the federal government’s conservatorship of Fannie Mae and Freddie Mac to assist underwater homeowners with mortgage modifications.  I am a cosponsor of H.R. 363, the Housing Opportunity and Mortgage Equity (HOME) Act, which would allow homeowners whose mortgages are owned or insured by Fannie Mae or Freddie Mac the opportunity to refinance at current interest rates.  This would give all homeowners the opportunity to reduce their monthly mortgage payment by hundreds of dollars – drastically decreasing the number of defaults and preventing foreclosures around the country.  That’s why I signed a letter to Acting Director of the Federal Housing Finance Agency (FHA) Edward DeMarco requesting that the agency write down the principal on mortgages of underwater homes.  FHFA is currently considering principal reductions for homeowners whose mortgages are held by Fannie Mae and Freddie Mac. 

Homeownership is a cornerstone of the American dream and we will take steps to ensure that everyone have access to safe, clean, and affordable housing.

(Updated April 2012)