10-24-2016  11:44 pm      •     
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The mortgage foreclosure crisis is in full swing and not looking to ease soon. Mortgage lenders continue to report their highest foreclosure and delinquency rates in five years. Rising default rates have not only affected those in the subprime market, but higher mortgage rates are putting a squeeze on borrowers with good credit, as they have in metro-Atlanta. 
Mortgage reform legislation recently passed by the House of Representatives and the U. S. Senate will go a long way in ensuring there is some relief for those families caught up in the current housing crisis.
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act, set for signature by President Bush this week, would provide relief to millions of Americans affected by this crisis by instituting the reform necessary to ensure these problems do not recur.  This important legislation incorporates a number of bipartisan bills designed to modernize the Federal Housing Administration, reform the government-sponsored enterprises Fannie Mae and Freddie Mac, and increase liquidity in the markets.
This legislation is designed to help borrowers who are at risk of default by allowing them to refinance with a loan guarantee from the government.  The existing lender would voluntarily decrease mortgage debt below the home's current value, which will give the owner equity in the house.  Lenders may also be able to recoup more money than if the house went in to foreclosure and the government would receive part of the gain if housing prices rise in coming years.  Moreover, with fewer foreclosures and forced sells, nearby homes would be more likely to retain their value, thus saving whole communities from devastation.
The legislation passed by the House and now under consideration in the Senate increases the Veterans Affairs home loan limit. The bill would also provide $11 billion in tax benefits including tax credits for first-time homebuyers, a real property tax deduction for non-itemizers, an additional $10 billion in mortgage revenue bonds for states and would improve access to low-income housing.  
As a member of the House Financial Services Committee, I have worked with my colleagues to build greater financial literacy. To that end I have introduced legislation, H.R. 3133, the Financial Literacy for Homeowners Act, which would provide grants to states and non-profit agencies to educate consumers on mortgage lending practices. 
It would also create a national toll free number where consumers can report cases of abuse by lenders.  It is of utmost importance that we provide consumers with education about lending laws, counseling and referral services. H.R. 3221 contains many of the provisions of my legislation, and would provide $180 million for housing counseling programs.
I remain concerned about the inordinate percentage of minority families suffering during this crisis and the affects this has on our communities.  The facts are disturbing at best: Black and Hispanic individuals have been disproportionately targeted for high cost subprime loans and are more likely to face foreclosure. 
In Georgia's 13th Congressional district, neighborhoods with an excessive number of foreclosures have become magnets for crime. Solving this problem is a matter of protecting our neighborhoods. We should also focus on the high social costs involved with this crisis, as schools can expect to receive less property tax funding as home values fall.
H.R. 3221 will allow many Americans to remain in their homes and fight predatory lenders. Consumers will be ensured of acquiring good loans, credit availability will be preserved, lender and consumer interests will be aligned, consumers will get a simple, understandable and meaningful disclosure of their loans terms and mortgage originators will no longer have incentives to steer consumers into bad loans. 
I am hopeful continued negotiations on this measure will prove fruitful and the Senate acts soon to pass this necessary legislation. In my opinion, all involved should get behind this strong legislation to address this housing crisis, not only for our economy's sake bur for those millions of affected Americans.

U. S. Rep. David Scott (D-Ga.)

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