Tom Perriello | Fifth District Report
Foreclosures in April hit another high – one in every 374 U.S. households received a foreclosure filing last month. So far, foreclosures are up 32 percent from this time last year. The number of foreclosed homes in Virginia’s Fifth District has grown more than tenfold since November of 2007.
Last week, I met with a number of residents and housing advocates dealing with the growing crisis of foreclosure. From the tales of predatory lending to lack of responsiveness from the mortgage lenders, I heard multiple accounts of how broken our system is.
The housing crisis is at the root of our current financial crisis, and too many homeowners who have worked hard and played by the rules are being unfairly punished because of the irresponsibility of both lenders and borrowers. Fortunately, Congress and the Obama Administration are taking steps to fix the problem.
Recently, the House passed H.R. 1728, the Mortgage Reform & Anti-Predatory Lending Act, which would curb abusive and predatory lending. I voted for the bill because it holds consumers accountable who lie about their incomes to qualify for a mortgage, holds lenders accountable who rely on predatory practices to turn a profit, and slams the door shut on speculators.
If Congress had passed these measures ten years ago, we may not be in today’s financial mess. The bill establishes a simple federal standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold. The bill also prohibits the financial incentives for subprime loans that encourage lenders to steer borrowers into more costly loans. Many homeowners in the current mortgage crisis were steered into more expensive loans than they qualified for.
The Obama Administration has introduced a program called Making Home Affordable, which is designed to stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels.
The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.
The website www.MakingHomeAffordable.gov provides homeowners with detailed information about these programs along with self-assessment tools and calculators to empower borrowers with the resources they need to determine whether they might be eligible for a modification or a refinance under the Administration’s program. Through this website, borrowers can also connect with free counseling resources to help with outstanding questions; locate homeowner events in their communities; find a checklist of key documents and materials to have ready when making that important call to their servicer as well as FAQs from borrowers in similar circumstances; and much more. There is also a toll-free hotline homeowners can call: (888) 995-HOPE.
One last word of caution: avoid foreclosure rescue scams. There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor. Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Never submit your mortgage payments to anyone other than your mortgage company without their approval.
Please feel free to contact me to share your concerns and ideas. You may call 1-888-4-TOM4US (1-888-486-6487); write to 1520 Longworth House Office Building, Washington, DC 20515; or visit www.perriello.house.gov to sign up for my weekly e-newsletter.
– Tom Perriello represents the Fifth District in the U.S. House of Representatives.