Kanjorski Announces Funding For Mortgage Counseling

I'll have more on this tomorrow.  I drove to Stroudsburg today for this event.  It's a complicated issue and I'll be better rested tomorrow to go over more of the issues involved.

KANJORSKI URGES DISTRESSED

HOMEOWNERS TO SEEK HOUSING

COUNSELING

 

Chairman Announces $230 Million in New Federal Funds

 
WASHINGTON – Congressman Paul E. Kanjorski (PA-11), the Chairman of the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee, today announced the appropriation of $230 million in federal funding, as laid out in the Consolidated Appropriations Act, for housing counseling and mortgage foreclosure mitigation activities.  These funds will make it possible for more families facing foreclosure to obtain help in negotiating changes to their mortgages to allow them to remain in their homes.  More than 400,000 families lost their homes to foreclosure in 2007, and some economists predict as many as 2 million families will face foreclosure in 2008 and 2009.  Lehman Brothers economist Michelle Meyer estimates that 2.8 million Adjustable Rate Mortgages (ARMs) will reset to higher interest rates in the next two years, resulting in increases in up to 30 percent in required monthly mortgage payments. 

  
“Many families facing the threat of losing their homes to foreclosure can negotiate changes to the terms of their mortgages if they communicate with their lenders, but they need help in understanding how to do that.  Counselors are available to help homeowners through this traumatic experience,” said Chairman Kanjorski.  “Because foreclosure is an expensive process for everyone involved, lenders are often willing to make concessions that will allow families to stay in their homes.”

  
In December, the appropriations bill passed through Congress and received the President’s signature allocating $180 million for NeighborWorks America to make grants to credit counseling agencies approved by the U.S. Department of Housing and Urban Development (HUD) and $50 million for housing counseling through HUD’s housing counseling assistance program.

Supporting additional resources for housing counseling and mortgage foreclosure mitigation activities is just one piece of a collection of actions taken by Chairman Kanjorski to respond to the slowing of the American economy as a result of the collapsed subprime mortgage market.  In November, the U.S. House of Representatives passed H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act.  Currently pending in the Senate, this bill includes Chairman Kanjorski’s Escrow, Appraisal, and Mortgage Servicing Improvements Act, which requires escrow accounts for many borrowers, improves appraisal independence, and enhances mortgage servicing.  Many of the problems this bill addresses arose in the Poconos several years ago which were discussed at a field hearing Congressman Kanjorski held at East Stroudsburg University in June of 2004. 

  
Other bills which have passed the House with Chairman Kanjorski’s support and are pending before the Senate include bills to reform the Federal Housing Administration and the Government Sponsored Enterprises (Fannie Mae, Freddie Mac, and the Federal Home Loan Bank system).  Chairman Kanjorski’s provision to permit the temporary increase in the conforming loan limit for mortgages purchased by Fannie Mae and Freddie Mac was included in the economic stimulus package that passed the House last week. 

  
“There is no silver bullet solution to the complex problems facing our slowing economy, especially as it relates to the housing industry and financial markets,” said Chairman Kanjorski.  “In recent years, lenders, borrowers, and investors alike seem to have forgotten the simple economic principle that money borrowed must be repaid.  Because a rising number of foreclosures can have a profound impact on entire communities -- not just the particular families at risk of losing their homes -- we need to work to avoid as many foreclosures as possible.”    

  
“It’s a sobering lesson: Markets are usually right, but they do fail sometimes.  We’ve seen a big failure lately in the subprime mortgage market,” said Mike Hanley, executive director of the United Neighborhood Centers of Northeastern Pennsylvania.  “As a senior member of the House Financial Services Committee, Mr. Kanjorski is a key player in representing homeowners in our community.”

  
Mr. Hanley was among several representatives of HUD-approved local housing counseling agencies who joined Chairman Kanjorski at Monday’s event.  Other attendees included:

 

• Mike Elick, president and CEO of Consumer Credit Counseling Service of Northeastern Pennsylvania;
• Jesse Ergott, executive director of Neighborhood Housing of Scranton;
• Mike Coyle, housing counselor for Catholic Social Services;
• Monsignor Joseph Kelly, Diocesan Secretary for Catholic Social Services;
• Dave Ritter, director of housing counseling for the Commission on Economic Opportunity;
• Donna Stewart, business development manager for the Pennsylvania Housing Finance Agency;
• Monroe County Commissioners Suzanne McCool, Theresa Merli, and Donna Asure;
• Kevin Washo, deputy state director for Senator Bob Casey (D-PA);
• Justin Poremba, deputy director of the Allentown office for Senator Arlen Specter (R-PA); and
• Representatives from the offices of state senators and state representatives who were in session in Harrisburg. 

Homeowners who are at risk of losing their homes to foreclosure are urged to contact housing counselors by calling 1-888-995-HOPE (4673) or the Pennsylvania Housing Finance Agency at 1-800-822-1174.