Washington, DC, Sept. 19, 2007 – U.S. Senator Sherrod Brown (D-OH) submitted the following written statement as part of today’s Banking, Housing, and Urban Affairs Committee consideration of the Community Partnership to End Homelessness Act of 2007 and the Federal Housing Administration (FHA) Modernization Act of 2007. Both pieces of legislation were voted out of committee:
“Mr. Chairman, I want to commend you and Senator Shelby for your work on the bills before us today.
“The FHA loan program is one important tool we can use to combat the mortgage crisis we face across the country.
“By providing fair loans at a fair price, the FHA program can give tens of thousands of families an alternative to the decidedly unfair loans they are caught in today. But we need to act quickly. Some of the biggest cohorts of these predatory loans are about to reset at rates that will quickly become unaffordable to more and more families.
“Last month, there were close to 18,000 foreclosure filings in Ohio, a third more than the month before and almost 140 percent more than in August of 2006.
“Needless to say, this legislation is only part of the solution. We need to ensure that the additional resources for counseling that were included in the housing appropriations bill are retained through conference and are signed into law by the president. We need to enact reasonable protections for borrowers so they are not preyed upon when it comes time to refinance these loans. And we need to explore additional avenues for helping borrowers.
“The stock market was clearly buoyed by the Federal Reserve’s decision to put in place rate cuts of 50 basis points, and there were congratulations all around.
“But I have to wonder if the huge swings we have seen in the stock market, and the troubles in the housing and other credit markets, would have been as severe if the Federal Reserve had attended to its role as regulator. If the Fed had curbed some of the excesses in the sub-prime market by exercising its regulatory powers, the resulting crunch would have been far milder.
“I hope that the Fed will act quickly to do its part, and I hope Congress will do the same.
“A lot of families cannot even afford the teaser rate of a bad mortgage. Unfortunately, a growing shortage of affordable rental housing and a simultaneous increase in poverty has lead to an increased incidence of homelessness in the United States.
“When people fall on difficult times, they often must choose between food, shelter, and other basic needs. In Ohio, I have witnessed this on many accounts.
“While the programs under the McKinney-Vento Act have helped alleviate the suffering of individuals faced with homelessness, much work still remains to be done. The Community Partnership to End Homelessness Act takes into account important measures that simplify the process of giving aid to communities to address homelessness, and strengthens prevention efforts.
“Again, Mr. Chairman, I thank you and Senator Shelby and all the members involved for your work on these bills, and I look forward to their quick consideration by the Senate as a whole.”