April 2, 2008

In the wake of high home foreclosures, instability in the financial markets and the historic government bail out of former investment giant, Bear Stearns, Congress is taking action to provide relief to homeowners potentially facing foreclosures.

U.S. Representative Ed Perlmutter, (CO-07) sits on the House Financial Services Committee, which has been working since early 2007 to stem the significant rise in mortgage foreclosures, including HR 1852, a bill that would in part increase the loan limits FHA could make. This and many other measures passed by the House are awaiting action in the U.S. Senate.

Additionally, House Financial Services Committee Chairman, Barney Frank, recently announced new draft legislation to allow the Federal Housing Administration (FHA) to insure and guarantee refinanced mortgages that have been significantly written down by mortgage holders and lenders. This new FHA bill provides up to $300 billion in new guarantees to help refinance at-risk borrowers into viable mortgages. In exchange for the acceptance of a substantial write-down of principal, FHA will guarantee the loan if the lender will restructure the loan amount in terms the borrower can reasonably expect to pay. This could potentially refinance between one and two million loans.

Perlmutter issued the following statement: "I am relieved to see the Senate finally moving past their differences to address these vital issues affecting millions of Americans. The House has been taking action on these measures for a year. This new FHA bill is designed to provide some stability and security to our homeowners, neighborhoods and our financial markets. With this FHA bill, everyone, including loan originators, lenders and borrowers will face sacrifices and conditions, but in the end the new approach could keep up to two million people in their homes and stabilize the rollercoaster we have seen on Wall Street."

"There will always be fluctuations in a free market economy, but we need to prevent the most dramatic swings. The fact is we have to limit some of the gains in order to limit some of the pain. In taking action, Congress must be careful in regulating the markets but regulators must enforce the law and act in a responsible manner on behalf of the millions of Americans harmed by risky lending practices," stated Perlmutter

Since early 2007, the House Financial Services and the full House of Representatives passed the following measures, which are currently sitting in the U.S. Senate awaiting action:

• HR 1427, the Federal Housing Finance Reform Act of 2007 (Passed House 5/22/2007)
• HR 1852, Expanding America’s Homeownership Act of 2007 (Passed House 9/18/2007)
• HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007 (Passed House 11/15/2007)
• HR 3524, a bill to reauthorize the HOPE VI Public Housing Program (Passed House 1/22/2008)

Colorado Statistics as reported in the Denver Post on Feb. 20, 2008

Colorado's housing industry continued its slide in record territory last year as foreclosure filings climbed 40 percent while consumers struggled to find footing in the turbulent marketplace.

Adams County had the highest rate with one foreclosure for every 23 households.

Arapahoe…county had one for every 35.

There were a record 39,915 foreclosures, or one for every 45 households in 2007, the Colorado Division of Housing reported