WASHINGTON, D.C.—As most homeowners in Calhoun County know, our nation is currently suffering through a major downturn in the housing sector. You may have seen on the national news recently that foreclosure numbers on houses are at an all time high.
In fact, in the past six months, there have been thousands of new foreclosures.
Unfortunately, these numbers seem to continue to increase almost every day.
Given that most of us consider homeownership part of the American Dream, this has been particularly difficult to see happen.
Although Alabama hasn’t seen the same increase in foreclosures that some other states have seen, in part because of our strong state economy, it’s possible this downturn could begin to touch more of us as time passes.
The housing crisis nationwide started for a number of reasons.
One was because some folks began living outside their financial means by refinancing and spending their home’s equity.
Another is because some mortgage companies sold many innocent, trusting folks a bad bill of goods they couldn’t afford.
As the price and values of homes began to decline and interest rates climbed, many folks realized they couldn’t pay their new, larger mortgage bills.
Tragically, many had no other options but to foreclose on their property.
As this year has continued, so have the problem and the foreclosures.
We’ve also watched as huge mortgage companies have had to file bankruptcy or close because of this national housing trend.
For those who have been hurt by the housing crunch, though, help and relief may be around the corner.
Recently, President Bush announced an agreement with several major financial institutions to freeze mortgage rates for certain homeowners that have adjustable rate mortgages.
What this means for us in East Alabama is that some families or individuals who have subprime loans and cannot afford to pay their mortgages may qualify to be locked in at their current interest rate.
Hopefully, this means some of these folks will not have to endure the pain and loss of foreclosure.
Congress has also been addressing the issue. Earlier this year, the House passed with my support the Mortgage Debt Relief Act.
This bill, if passed by the Senate and signed by the president, would help provide relief to homeowners who have recently refinanced their debt. The bill would help homeowners avoid foreclosure by eliminating an unfair tax on income incurred from the cancellation of this debt.
Also the House passed with my support, the Mortgage Reform and Anti-Predatory Lending Act.
This legislation, if passed by the Senate and signed by the president, could help rein in aggressive lending practices by big mortgage companies that contributed to this crisis.
All of these are important first steps toward helping our national economy stabilize during the housing downturn. More could be done, and I hope Congress and President Bush continue to work to provide relief.
As always, please feel free to contact me with your concerns at www.house.gov/mikerogers.
