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.
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