Preventing millions of unnecessary foreclosures is important for all of us: the entire economy and every taxpayer.
We're facing the wave of foreclosures today because reckless lenders for years mass-marketed bad loans. By the end of the bubble in 2006, six out of every 10 borrowers who got a subprime mortgages could have qualified for a lower-cost conventional loans. Who would knowingly sign a contract that would cost them tens of thousands of dollars more than necessary?
The housing bill is a good step but even so will, at best, help about 500,000 families stay in their homes. That's not enough. The economy will continue to take a beating if we don't do more to stop 6.5 million foreclosures Wall Street analysts expect over the next few years.
We are pleased that many state and federal leaders are strongly focused on the housing crisis. Today we need additional common-sense solutions, such as
- requiring better reporting from mortgage servicers about loan modifications;
- allowing bankruptcy courts to modify mortgages on the primary residences of financially distressed families; and
- providing temporary deferment of foreclosures until housing markets stabilize.
For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Sharon Reuss at (919) 313-8527 or sharon.reuss@responsiblelending.org; or Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org.