Mr. President, I support the Helping Families Save Their Homes Act of 2009.
May 12, 2009 – (RealEstateRama) — The foreclosure situation in my state of Michigan continues to be dire. According to data released by real estate firm RealtyTrac, even though there are less foreclosure filings than this time last year, there were still over 11,000 Michigan foreclosure filings in January 2009 alone. That’s one foreclosure filing for every 397 households IN JUST ONE MONTH, which puts Michigan’s foreclosure rate at the seventh highest in the nation. Nationwide, foreclosure filings are up 18% compared to this time last year.
Unfortunately, homeowners facing foreclosure are not the only ones being impacted by this crisis. Property values have dropped significantly in many areas, due in large part to the increased number of abandoned and foreclosed homes. These losses in property values also decrease State and local revenue from property taxes, creating shortfalls in revenues and reducing funding for important State and local programs and services.
Over the past year, Congress has taken a number of steps to help reduce the effects of this crisis. Today, the Senate is set to pass legislation that will further expand the tools available to homeowners facing foreclosure and increase access to these important programs. This legislation will expand access to the Hope for Homeowners program by providing incentives for servicers and lenders who participate in the program and streamlining borrower certification requirements. It will also expand the ability of FHA and Rural Housing to modify loans in order to help a homeowner avoid foreclosure and authorize additional funding for foreclosure prevention activities, including housing counseling and additional fair housing field workers.
Importantly, this Act also creates additional enforcement tools to ensure the Department of Housing and Urban Development (HUD) is able to go after bad lenders who break the rules or misuse these programs.
In addition to these improvements, the Act makes a number of changes to ensure the safety of depositors’ savings, and improve the health of the banks and credit unions that are essential to our economic recovery.
Last year, we increased deposit insurance coverage from $100,000 to $250,000. That provision is set to expire at the end of this year. This Act will extend the additional coverage for another four years. The Act will also increase the borrowing authority of the FDIC to $100 billion and of the National Credit Union Administration to $6 billion. Collectively, these changes will help ensure the security of deposits for years to come.
The Act also helps banks and credit unions that may be struggling to pay special assessments for their deposit insurance coverage. Due to the economic downturn, the insurance funds for these institutions are seeking additional funding through special assessments. And for many of these institutions, these assessments are at the absolute worst time – while they are trying to stabilize their capital positions. The Act responsibly spreads out the period over which the insurance funds may seek these assessments, thereby giving the banks and credit unions the ability to preserve and more effectively use their precious capital. Lastly, the Act creates a Temporary Corporate Credit Union Stabilization Fund to help ensure the stability and security of those who rely upon corporate credit unions.
This bill includes many improvements to current programs that will help the country dig out of this foreclosure crisis. To do so will require the efforts of Federal, State, and local governments, as well as community and neighborhood organizations, lenders, brokers, and borrowers. This Act will bring much-needed help to many of our homeowners who are trying desperately to save their homes as well as ensure that their savings are protected, and it deserves my support.
Contact: Senator Levin’s Office