Issues: Home Mortgage and Foreclosures
Home Mortgage and Foreclosures
Given the depth and breadth of the foreclosure crisis and its profound effects on our economy and our communities, I support highly targeted policy action to reduce the number of homes lost to foreclosure in the immediate future. The collapse of the mortgage market will cripple our entire financial system, and policies enacted to prevent this collapse are not “bailout” but rather highly necessary to return stability to our housing and credit markets. Action can and should be taken to encourage and facilitate the creation of sustainable mortgages for families at risk of preventable foreclosure.
The ripple effects of the foreclosure crisis have extended well beyond just borrowers and lenders. Foreclosures affect entire neighborhoods by:
• Driving down the value of homes in the community
• Adding to the supply of houses on the market, further exacerbating the downward pressure on home prices and construction-related industries
• Increasing criminal activity, as homes in foreclosure are often magnets for crime and suffer from disrepair
• Widening economic inequality, as predatory lending practices are often more pervasive in low-income and minority communities, where better loans are not readily available.
• Home loan interest rates are rising, making current loans with adjustable rates less affordable and new loans less desirable
To prevent this crisis from repeating itself, legal and regulatory safeguards must be improved so as to ensure that borrowers understand their loans, that lenders are making appropriate and affordable loans, and that investors in the secondary mortgage market clearly understand the product they are buying and the risk involved. There is a need for stronger lending standards that ban predatory lending practices, such as loans made without documentation of income or without any regard for the consumer’s ability to repay. To find a balanced solution to the home mortgage and foreclosure crisis will require input and cooperation from various groups and interests. I will bring together leaders from the mortgage and banking industries, investors, federal regulators, consumer advocates and all those with a significant stake in the stabilization of the housing and credit markets to find common ground in the preservation of home ownership and financial stability. Working across party lines toward a bi-partisan solution is key to solving our growing housing concerns.
For a more in-depth look at Jim’s Housing Policy click here.