Keeping Nevadans in their Homes
Every member of Congress has had to face the sub-prime mortgage crisis to varying degrees. Here in Nevada, we have been hit particularly hard with a foreclosure rate of one in 154 homes versus the national average of one in 555. In an effort to ease the threat of foreclosure, I have introduced bipartisan legislation which will expand a stateās bonding authority to allow families, who need a more manageable mortgage rate, to refinance.
My fundamental principle is to keep Nevadans in their homes.Ā In addition to hosting multiple town halls and rolling out legislation, I organized a mortgage fair where individuals will be connected with lenders and counselors to work out solutions to best remedy their individual situation and circumstances.
Many of my constituents ask why the federal government should come to the rescue of āirresponsible borrowers.ā The answer is clear: The housing crisis has been severe enough that it has negatively impacted the values of all homes in my district. In addition, stabilization in this housing sector will have a major impact in reviving overall economic growth.
There have been two national initiatives to help borrowers. The Hope Now Coalition was introduced as a grass roots, one-stop shop for consumers who do not know where to go for help. In addition, Secretary Paulsen negotiated with six of the largest financial houses and in late February introduced Project Lifeline. This program originally granted a 30-day reprieve from looming foreclosures to allow homeowners an opportunity to renegotiate the terms of their loans.
Countrywide Financial, Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Washington Mutual have sent out letters to borrowers who are at least 90 days past due to let them know their loan is being considered for the 30 day āpause.ā This is not a moratorium.
One aspect of this housing crisis that is often misunderstood is that most lenders do not want to repossess large numbers of homes, especially in a soft market. They have an incentive to work with the borrower. Project Lifeline has created a consistent policy with the lenders, demonstrating a step-by-step approach to finding realistic solutions to individualās mortgage issues.
Borrowers’ situations will be handled on a case-by-case basis. While the plan includes sub-prime, prime and home equity loans, it leaves out those who are in active bankruptcy, those who are in active foreclosure with the sale date within 30 days, investment properties and vacant homes.
While the actions of the Hope Now Coalition and Project Lifeline are important first steps, we must enact responsible legislation that alleviates the suffering of my constituents and returns stability to the housing market.