Washington, DC – September 9, 2009 – (RealEstateRama) — Vacant homes in many neighborhoods throughout our state are a stark reminder that mortgage foreclosures continue to play a major role in destabilizing the foundation of our economy. Predatory and subprime mortgages, combined with substantial job losses, have led to increasing home foreclosures, home abandonment, and falling housing prices throughout Ohio. The problem affects us all.
In 2008, over 6,200 home foreclosures were reported throughout the 3rd Congressional District of Ohio – a three-fold increase from a decade ago. These include 4,091 foreclosures in Montgomery County, 1,558 in Warren County, 351 in Highland County, and 287 in Clinton County. It stands to reason that 2009 will prove even more grim. A recent Associated Press analysis indicated that Ohio has three of the most vacant neighborhoods in the nation.
Unlike the headline-grabbing foreclosures in California, Nevada and Florida, the southwest Ohio home losses were not driven by irresponsible home buying, but ordinary people who were victimized by predatory lenders or workers who’ve lost their jobs as the economy entered a deep recession.
This is not an isolated problem. The loss of a home to foreclosure has a broader impact on the surrounding neighborhood, lowering average property values by up to 9 percent. Boarded up homes, falling property values, and increased crime also lead to an eroded local tax base, and impair a city’s ability to provide important services to families.
Most experts agree that the foreclosure crisis was a major contributor to the present economic upheaval. In order to better understand this problem, I introduced H.R. 1285 in March to create a Commission on the Foreclosure and Mortgage Lending Crisis. Modeled after the 9/11 Commission, this bi-partisan panel would undertake a comprehensive analysis and review of the causes of the current foreclosure and mortgage lending crisis and recommend changes that would prohibit the kinds of lending practices that produced this tragedy. This past May, Congress passed S. 398, the Fraud Enforcement and Recovery Act of 2009, establishing a commission to study the current economic crisis. It included several of the key principles from H.R. 1285 dealing with the impact of the mortgage lending and foreclosure crisis.
Also, in May of this year, I voted in favor of H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act that would require increased home loan disclosures and require all home mortgage lenders to provide families with loans that they have a reasonable ability to pay.
One obstacle to analyzing home foreclosures is the lack of a national database tracking home loan defaults and their causes. In July, I introduced H.R. 3195, the National Home Mortgage and Loan Performance Registry Act. This legislation would create such a foreclosure database, allowing us to monitor and evaluate the mortgage market, better identify emerging problems and potentially help to avert another housing crisis.
Last month, I convened a panel discussion of local and federal officials examining the impact of the housing crisis in our region. Those participating included the Cincinnati Field office director for the U.S. Department of Housing and Urban Development, as well as regional housing experts. I expect to use the testimonies and discussions from this forum as the basis for further legislative efforts to assist local homeowners.
In 2007, I participated in a housing forum in Washington with other members of the Ohio Delegation which discussed homebuyers’ responsibility in the mortgage process. It was agreed that housing counseling programs are an effective way of deterring families from purchasing a loan product they can’t afford. As a result, I authored an amendment to the 2008 Transportation, Housing and Urban Development Appropriations Act that increased funding for housing counseling for local agencies by nearly $7 million dollars.
While Congress has made attempts to address the root causes of the housing crisis, it is clear that we need to reevaluate current federal housing policy. Only through effective mortgage and housing reform will we begin to make a difference in keeping Americans in their homes, stabilizing the housing markets, and addressing home abandonment; which hurts all our communities.
