WASHINGTON, DC– In a step toward stabilizing the housing market and helping families at risk of foreclosure keep their homes, Congressman Jim Himes today helped pass the Helping Families Save Their Homes Act. The bill begins to put in place President Obama’s comprehensive Homeowner Affordability and Stability Plan.
This legislation is critical to the overall recovery of our economy. Home prices dropped 18 percent in the last quarter of 2008. More than 14 million homeowners owe more on their mortgage than their home is worth, and they cannot refinance.
“Stabilizing the housing market is central to restoring the American economy,” said Congressman Himes. “This bill will help families stay in their homes and gives banks more confidence to make loans—both important steps toward helping the economy recover.”
This plan is expected to help 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure and to protect their neighbors whose house values would drop as a result of a nearby foreclosure. Each foreclosed home reduces nearby property values by as much as 9 percent.
The bill includes key incentives to encourage lenders to negotiate affordable mortgages for homeowners whose homes are worth less than they owe, at risk of foreclosure, and those nearing bankruptcy. Over the past few weeks, Congressman Himes has worked with his colleagues to make improvements to this legislation that ensure homeowners are able to avoid bankruptcy whenever possible by giving them access to a systematic loan modification process. In addition, the Helping Families Save Their Homes Act spurs mortgage refinancing by fixing the Federal Housing Administration’s Hope for Homeowners program, reducing fees, and offering new incentives for lenders.
Without spending one federal dollar, this bill gives judges the chance to modify existing mortgages and protects banks from losing money they have lent. Currently, mortgages on residential homes are the only form of secured debt that cannot be modified in bankruptcy proceedings. This bill would make the same options available to these mortgage-holders that are currently available in bankruptcy proceedings for second homes, vacation homes, or investment properties.
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Congressman Jim Himes represents Connecticut’s 4th District, which includes the communities of Bridgeport, Darien, Easton, Fairfield, Greenwich, Monroe, New Canaan, Norwalk, Oxford, Redding, Ridgefield, Shelton, Stamford, Trumbull, Weston, Westport, and Wilton.