Senator Carl Levin on The Foreclosure Prevention Act of 2008: 04/10/08
The progress this bill represents is overdue. The foreclosure crisis is dire, and there is much still to be done. But this bill offers some immediate help.
Over the past few months, I have hosted a series of roundtable meetings in Michigan communities with leaders from local and state government, as well as organizations who are in the trenches working with families facing foreclosure, to discuss practical ways to help homeowners and protect our economy from further damage. When I have asked for their feedback on this bill, they think it would help address a number of the problems they highlighted.
Across Michigan, communities would like to rehabilitate abandoned and foreclosed properties so that surrounding property values do not continue to fall. But currently there are not funds to meet the growing demand. This bill provides Federal block grants to areas with the highest foreclosure rates and filings to help rehabilitate abandoned or foreclosed properties and prevent further damage to local housing values and neighborhoods. In addition, taxpayers who purchase a home that has been foreclosed upon will be eligible for a tax credit.
This bill also provides funding for much needed pre-foreclosure counseling. I am encouraged by the good work currently being done by many counseling organizations who are trying to help families avoid foreclosure. But across Michigan, foreclosure prevention counselors are overwhelmed, and a lack of funds is tying the hands of local groups trying to help keep families on track.
This bill also helps address the critical need for more affordable loans to help families refinance and stay in their current homes. States are authorized to issue new tax-exempt bonds to help homeowners refinance adjustable rate mortgages. Providing refinancing options for homeowners in potentially solvent situations is an important component in the effort to reverse the current tide of foreclosures.
Ending the foreclosure crisis will require a team effort among Federal, State, and local governments, community and neighborhood organizations, and lenders, brokers, and borrowers. This bill recognizes that fact. It provides an opportunity to help keep struggling families in their homes. It provides an opportunity to help restore our housing markets by keeping declining property values stable. It will protect neighborhoods from a glut of vacant homes. There is much more we need to do, but this bill represents a long overdue start. I am hopeful that an even stronger version will return quickly to the Senate from a House/Senate conference committee so we can get much-needed help to people in Michigan as soon as possible.