Washington, DC – The Senate this week is debating a housing foreclosure package after Republicans reversed course and elected not to continue February’s filibuster. The legislation would keep many families in their homes, assist communities in rebuilding their neighborhoods, and help prevent foreclosures in the future. U.S. Senator Sherrod Brown (D-OH), a member of the Senate Banking, Housing, and Urban Affairs Committee, today on a news conference call urged the administration and Republicans in Congress to do more to help Main Street through this crisis. Brown was joined on the call by Dayton Mayor Rhine McLin, John and Vicki Glicken, a family from Lyndhurst, Ohio, and Richard Nemeth, State Chair for the Northern District of the National Association of Consumer Bankruptcy Attorney’s (NACBA).
“Last year, 1,500 Ohio families lost their homes every week. And the end is nowhere in sight. In Ohio, there are another 120,000 home loans that are delinquent,” Brown said. “The needs of Ohio’s communities are critical. This crisis has an impact far beyond just the people who lose their homes. Whenever a home goes into foreclosure, entire neighborhoods are hurt.”
Brown today said he would work to improve the Dodd-Shelby bill on the Senate floor by pushing for the inclusion of the bankruptcy provision and an additional $100 million for housing counseling.
The Dodd-Shelby proposal specifically would:
Increase pre-foreclosure counseling funds to $100 million. This additional funding would assist as many as 500,000 additional families to connect with their mortgage servicer or lender to explore options that will keep them in their homes. Brown will work to increase this to $200 million.
Allow Housing Finance Agencies to Issue Bonds for Refinancings by increasing the current cap by $10 billion. This would allow housing finance agencies to use proceeds from mortgage revenue bonds to refinance subprime loans, provide mortgages for first-time home buyers, and for multifamily rental housing.
$4 Billion in Community Development Block Grant (CDBG) Money for Purchase and Rehab of Foreclosed Properties. Unoccupied homes that have been foreclosed upon sap neighboring homes of their value and strain municipal resources. The legislation would provide additional CDBG funds to local governments to purchase these properties, rehabilitate them if necessary, and rent or re-sell them.
Include a modified version of the FHA Modernization Act. The FHA bill, which passed Brown’s Senate Banking Committee in September and the full Senate in December, would increase FHA single-family loan limits and expand the FHA’s reverse mortgage program, which allow seniors to convert equity into cash by taking out a mortgage.
Help veterans afford their homes. The bill would increase loan limits for veterans, extend current foreclosure protections for returning vets from 90 days to 9 months, and extend current interest rate protections for returning veterans. In addition, the Department of Defense would be required to establish a counseling program to ensure veterans and active service members can access assistance if facing financial difficulties.
Improve Disclosure. This would amend the Truth-in-Lending Act and improve the loan disclosures given to homebuyers not only when they apply for a home purchase loan, but also when they refinance their home.
Tax changes to help homeowners, housing finance agencies, and businesses. The bill would include an increase of $10 billion in the amount of debt that could be issued by housing finance agencies to help homeowners refinance their mortgages, a standard property tax deduction for non-itemizers, a tax credit for buyers purchasing foreclosed properties, and a limited loss carryback for businesses to help them weather the housing downturn.
