Vacant homes in many neighborhoods throughout our state are a starkreminder that mortgage foreclosures continue to play a major role indestabilizing the foundation of our economy. Predatory and subprimemortgages, combined with substantial job losses, have led to increasinghome foreclosures, home abandonment, and falling housing pricesthroughout Ohio. The problem affects us all.
In 2008, over 6,200 home foreclosures were reported throughout the 3rdCongressional District of Ohio - a three-fold increase from a decadeago. These include 4,091 foreclosures in Montgomery County, 1,558 inWarren County, 351 in Highland County, and 287 in Clinton County. Itstands to reason that 2009 will prove even more grim. A recentAssociated Press analysis indicated that Ohio has three of the mostvacant neighborhoods in the nation.
Unlike the headline-grabbing foreclosures in California, Nevada andFlorida, the southwest Ohio home losses were not driven byirresponsible home buying, but ordinary people who were victimized bypredatory lenders or workers who’ve lost their jobs as the economyentered a deep recession.
This is not an isolated problem. The loss of a home to foreclosure hasa broader impact on the surrounding neighborhood, lowering averageproperty values by up to 9 percent. Boarded up homes, falling propertyvalues, and increased crime also lead to an eroded local tax base, andimpair a city’s ability to provide important services to families.
Most experts agree that the foreclosure crisis was a major contributorto the present economic upheaval. In order to better understand thisproblem, I introduced H.R. 1285 in March to create a Commission on theForeclosure and Mortgage Lending Crisis. Modeled after the 9/11Commission, this bi-partisan panel would undertake a comprehensiveanalysis and review of the causes of the current foreclosure andmortgage lending crisis and recommend changes that would prohibit thekinds of lending practices that produced this tragedy. This past May,Congress passed S. 398, the Fraud Enforcement and Recovery Act of 2009,establishing a commission to study the current economic crisis. Itincluded several of the key principles from H.R. 1285 dealing with theimpact of the mortgage lending and foreclosure crisis.
Also, in May of this year, I voted in favor of H.R. 1728, the MortgageReform and Anti-Predatory Lending Act that would require increased homeloan disclosures and require all home mortgage lenders to providefamilies with loans that they have a reasonable ability to pay.
One obstacle to analyzing home foreclosures is the lack of a nationaldatabase tracking home loan defaults and their causes. In July, Iintroduced H.R. 3195, the National Home Mortgage and Loan PerformanceRegistry Act. This legislation would create such a foreclosuredatabase, allowing us to monitor and evaluate the mortgage market,better identify emerging problems and potentially help to avert anotherhousing crisis.
Last month, I convened a panel discussion of local and federalofficials examining the impact of the housing crisis in our region.Those participating included the Cincinnati Field office director forthe U.S. Department of Housing and Urban Development, as well asregional housing experts. I expect to use the testimonies anddiscussions from this forum as the basis for further legislativeefforts to assist local homeowners.
In 2007, I participated in a housing forum in Washington with othermembers of the Ohio Delegation which discussed homebuyers’responsibility in the mortgage process. It was agreed that housingcounseling programs are an effective way of deterring families frompurchasing a loan product they can’t afford. As a result, I authored anamendment to the 2008 Transportation, Housing and Urban DevelopmentAppropriations Act that increased funding for housing counseling forlocal agencies by nearly $7 million dollars.
While Congress has made attempts to address the root causes of thehousing crisis, it is clear that we need to reevaluate current federalhousing policy. Only through effective mortgage and housing reform willwe begin to make a difference in keeping Americans in their homes,stabilizing the housing markets, and addressing home abandonment; whichhurts all our communities.