President’s Plan Only Helps 7,000 Ohio Families Facing Foreclosure-Brown Announces Initiatives For Substantial Housing Reforms

Washington, DC – December 12, 2007 – According to the Center for Responsible Lending, only 7 percent of families facing foreclosure nationwide will be helped by the proposal announced by President George W. Bush last week. U.S. Senator Sherrod Brown (D-OH) today called the foreclosure proposal woefully inadequate and urged Congress and the Federal Reserve to act quickly on substantial housing reforms.

Only 7,000 Ohio families facing foreclosure would be helped by the president’s proposal. However, Ohio foreclosures are expected to top 80,000 this year. Brown, a member of the Senate Banking, Housing, and Urban Affairs Committee, today introduced new legislation with Chairman Chris Dodd (D-CT) to stem the tide of foreclosures.

“Every day, more than 200 families in Ohio lose their homes,” Brown said. “Ohio is faced with one of the highest foreclosure rates in the country. Ohio’s six biggest cities are among the 30 hardest hit in the country. What we do in Washington, or what we fail to do, will have a profound effect on families in Akron, Cincinnati, Cleveland, Columbus, Dayton, and Toledo.”

Today, Brown announced The Homeownership Preservation and Protection Act of 2007 with Dodd to help middle class families facing foreclosures. Dodd worked with Brown to include many provisions from The Borrower’s Protection Act of 2007, the first major legislation addressing the current subprime foreclosure crisis which Brown introduced in May with Senators Charles E. Schumer (D-NY) and Robert Casey (D-PA). The comprehensive legislation would make money for mortgages available on fair terms both for the creation and sustainability of homeownership, establish new lending standards to ensure that loans are affordable and fair, and create a transparent set of rules for the mortgage industry so that capital can safely return to the market without bad lending practices driving out the good.

On Friday, Brown joined with his Democratic colleagues on the Senate Banking Committee in a letter to Federal Reserve Chairman Ben Bernanke to reiterate their call that he use the authority under the Home Ownership and Equity Protection Act (HOEPA) to curb predatory lending practices in subprime markets. Brown joined a similar letter in April explaining that the Fed Chairman is required to take action against unfair or deceptive practices in the mortgage market. Brown recommended the Fed require mortgage originators evaluate borrower’s ability to repay prior to making a loan, designate the failure to escrow taxes and insurance as an unfair and deceptive practice, and restrict the use of low- and no-documentation loans. Brown met with Bernanke in October to underscore his support for strong regulatory action.

Brown today also called on the Senate to pass the Federal Housing Administration (FHA) Modernization Act of 2007 which would revitalize the FHA loan program and provide a fair and affordable financing option for many borrowers. Among other things, this legislation would increase FHA single-family loan limits, lower and streamline downpayment requirements and set the maximum loan amount at 100 percent of the appraised value of the home, and enhance counseling. Majority Leader Reid’s (D-NV) repeated efforts to consider this legislation have been blocked by a Republican objection.

“Every thing we have tried to do to help homeowners – from counseling funds, to FHA reform, to tax relief – has been blocked by Republicans. If President Bush is really serious about helping homeowners, he will bring this to an end. The people of Ohio have waited too long for relief. They needed it yesterday,” Brown added.