Congresswoman Waters Supports Plan to Keep Americans in Their Homes
Congresswoman Maxine Waters (D-CA) voted today in favor of the Helping Families Save Their Homes Act (H.R. 1106), legislation that will prevent foreclosures and help stabilize the housing market.
The Helping Families Save Their Homes Act gives bankruptcy judges the ability to modify existing mortgages for families who file for Chapter 13 bankruptcy as an incentive to spur lenders into voluntarily modifying loans. It gives lenders the confidence to modify loans by protecting them from some lawsuits. The legislation also spurs mortgage refinancing by fixing the Federal Housing Administration's Hope for Homeowners Program, reducing fees and offering new incentives for lenders.
"This legislation provides fairness and hope to families who are facing foreclosure. Families who own one home deserve the same right to keep their home when they face bankruptcy as investors and speculators who own two or three homes, but under current law they do not have the same protection," said Congresswoman Waters. "Without spending one federal dollar, this legislation could keep hundreds of thousands of families across the country from facing foreclosure and losing their homes."
Congresswoman Waters had a unique opportunity to work on both the housing provisions of the legislation as Chairwoman of the Housing and Community Opportunity Subcommittee and on the judicial mortgage modification provisions as a member of the Judiciary Committee.
Congresswoman Waters said, "Stabilizing the housing market is central to restoring the American economy. We all stand to lose if we do not stop the steep decline in home prices. In fact, each foreclosed home reduces nearby property values by as much as 9 percent. I will continue to work with President Obama to help the 7 to 9 million American families at risk of losing their homes and to protect their neighbors from losing value in their homes."
Home prices dropped 18 percent in the last quarter of 2008. More than 14 million homeowners owe more on their mortgage than their home is worth, making it difficult for them to refinance and putting many at risk of foreclosure. President Obama's comprehensive Homeowner Affordability and Stability Plan working in conjunction with H.R. 1106 and other Congressional initiatives will help many homeowners refinance and prevent foreclosure.
H.R. 1106 also includes a provision authored by Congresswoman Waters that will ensure that FHA loan programs -- which have been helping families to refinance into safer mortgages -- are out of bounds for the very worst subprime lenders who created this mortgage mess in the first place. Lenders participating in the FHA home mortgage insurance program will be required to be approved by HUD and better ensures that predatory lending entities and individuals are not allowed to participate in FHA programs.
Congresswoman Waters had introduced this provision recently as a separate bill the Honest FHA Originator Act (H.R. 1116). "I am pleased that the House included this provision and passed it as part of the Helping Families Save Their Homes Act. Predatory lenders should not be allowed to participate in government programs at taxpayer expense," she said.
Among the details of President Obama's foreclosure prevention plan announced yesterday is a website, www.financialstability.gov, which includes an eligibility quiz for homeowners struggling to make their payments.
In California, more than 9.1% of mortgages were past due as of December 2008. The national rate for delinquent loans was almost 7.9%.