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The Mortgage Crisis

The foreclosure crisis has affected millions of Americans, including hundreds of thousands in the 18th district of California. For many of my constituents, mortgage payments are simply too expensive for them to pay, and they are left with few options other than foreclosure.

As you know, the U.S. housing market is in turmoil, and foreclosure rates across the country have skyrocketed to historic levels. The Central Valley, particularly Stockton, Modesto, and Merced, has been among the hardest-hit areas in the nation. 

Foreclosures have uprooted families and pushed homeownership beyond the reach of many of my constituents. Abandoned houses are crumbling under the weight of vandalism and disrepair. Neighborhoods face steep declines in home equity, and lenders have been reluctant to lend in regions with foreclosure rates as high as the Valley's. Unfortunately, this crisis appears to be far from over, and families already burdened by high gas and food costs need some relief.

Actions

•  In response to this foreclosure epidemic, the Obama Administration has devised a plan called Making Home Affordable. This plan will allow struggling homeowners an opportunity to get a loan modification from their borrowers. It will also allow borrowers who have not missed a payment and have a loan owned by Freddie Mac or Fannie Mae to refinance at a lower mortgage rate. I have expressed my concerns that this plan will not be sufficient to help my constituents. And I continue to push the Administration to establish benchmarks to determine whether or not Making Home Affordable is as successful as it needs to be to address the foreclosure epidemic in areas like the Central Valley.

See letter to Housing and Urban Development Sec. Donovan regarding benchmarks

•  I have also reached out to HUD Secretary Donovan to make sure he is aware that some areas of the country have been hit harder by the housing crisis than others. I arranged a meeting with several of my colleagues from these areas and Secretary Donovan to allow us the opportunity to explain the extent of the devastation foreclosures have caused in our communities. Since then, I have communicated numerous times with Secretary Donovan and will continue to work with him to ensure the Administration's housing proposals will help my constituents.

See my meeting request to Sec. Donovan to discuss hardest-hit areas' concerns

•  In addition to trying to improve the Making Home Affordable Program, I have introduced a bill, H.R. 230 (The HOME Act), that would allow all homeowners, whether first-time buyers or borrowers, to refinance their mortgage at a below-market rate. In order to increase this proposal's chances of passing, I am revising it to lower the associated costs. I plan to reintroduce the less costly version of this legislation.

See a one-page description of The HOME Act

See The HOME Act as introduced

•  I am working to address the overall economic downturn in the Central Valley by drafting legislation that would allow the President to declare an Economic Disaster Area in regions that have suffered disproportionately from the housing crisis and the recession. This legislation would allow state and local governments that are designated as Economic Disaster Areas to receive additional federal funding to recover from the economic crisis. The bill text will be available in the coming weeks, and I invite my constituents to write me in support of this idea.

See letter to President Obama asking for his support of my proposal