The causes and effects of the economic downturn are felt deeply in Nevada.  Throughout my time in Congress, I have worked hard to confront this crisis by providing tens of millions of dollars in resources to Nevada housing counselors and neighborhood stabilization programs, through tax relief for homeowners that receive a principal reduction, and by establishing a number of federal foreclosure-prevention programs.  These efforts have certainly helped, but given the unique circumstances of our state’s economy, I remain committed to fighting for Nevada homeowners.

Wall Street Reform
I am proud to have led the fight to pass a landmark Wall Street reform bill to curb abuses that led to our nation’s recent economic crisis.  Despite months of Republican opposition, I stood on the side of Main Street and fought to put consumers first, rein in reckless gambling that led to the worst financial crisis in a generation, and end taxpayer funded bailouts of banks that had become too big to fail.  The Dodd-Frank Wall Street Reform and Consumer Protection Act ended the possibility that taxpayers will be asked to write a check to bail out financial firms that threaten the economy and eliminated loopholes that allowed unscrupulous mortgage lenders to pedal loans that confused and misinformed borrowers and contributed to Nevada’s housing crisis.  The bill created the Consumer Financial Protection Bureau (CFPB), an independent watchdog housed at the Federal Reserve, with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices.

Home Affordable Refinance Program (HARP)
On February 18, 2009, President Obama announced the Making Home Affordable (MHA) program, aimed at helping homeowners who are having difficulty making their mortgage payments avoid foreclosure.  The MHA allows qualified homeowners to refinance or modify mortgages owned or guaranteed by Fannie Mae or Freddie Mac under the Home Affordable Refinance Program (HARP).  HARP allows homeowners with mortgages to refinance into loans with more favorable terms even if they owe more than the value of their homes.  While some Nevadans have taken advantage of this program, too many found themselves ineligible.  I fought to make the program more responsive to Nevada’s needs.  In October 2011, President Obama traveled to Las Vegas to announce changes to the HARP program, which included:

• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers.
• Lifting the cap of 125% loan-to-value for eligible borrowers refinancing into fixed rate loans.
• Eliminating the need for a new property appraisal for eligible borrowers.
• Extending the program through December 31, 2013.

Please visit the Making Home Affordable website for more information and to see if you are eligible for the modified Home Affordable Refinance Program.

Mortgage Forgiveness Debt Relief Act
The Mortgage Forgiveness Debt Relief Act, which was signed into law in 2007, provides tax relief for the discharge of debt associated with a person’s principal residence.  This tax relief was initially enacted for two years and offers relief to homeowners who would otherwise have owed taxes on forgiven debt.  This change generally allows taxpayers to exclude income from the discharge of debt on their principle residence.  Without this change, debt reduced through mortgage restructuring and debt forgiven after a foreclosure or short sale would have been treated as income and been subject to income tax.  The Mortgage Forgiveness Debt Relief Act, which was extended by the Emergency Economic Stabilization Act of 2008, also created a temporary exception for debt forgiveness discharged between January 1, 2007 and December 31, 2012.  I am proud to have supported both of these bills.

During the final weeks of the 112th Congress, leaders in both parties worked together to avoid the so-called “fiscal cliff” of drastic spending cuts and tax hikes.  The negotiations were long and difficult, but in the end, the compromise provided certainty to taxpayers and businesses.  The American Taxpayer Relief Act of 2012, which President Obama signed into law on January 2, 2013, prevented tax increases on 98 percent of Americans and 97 percent of small businesses by permanently extending the middle-class tax cuts.  Additionally, this bipartisan legislation extends the mortgage debt forgiveness relief through December 31, 2013.

Neighborhood Stabilization Program
I was pleased to support the establishment of the Neighborhood Stabilization Program (NSP) in the Housing and Economic Recovery Act of 2008.  This program was designed to help stabilize communities blighted by foreclosures and abandonment.  I also helped revise key elements of NSP to make sure funds went to communities that are hardest-hit by the housing crisis and to expand the pool of eligible recipients.  This effort resulted in a commitment of up to $1.3 million in emergency technical assistance to Las Vegas and Clark County in order to ensure the effectiveness of their neighborhood stabilization programs.  I also worked with Housing and Urban Development Secretary Shaun Donovan to get additional Neighborhood Stabilization funds redirected to Nevada, resulting in a commitment of an additional $60 million in resources.  Nevada received a total of over $160 million from the program.

Helping Families Save Their Homes Act
I worked hard to lead passage of the Helping Families Save Their Homes Act, which includes several provisions to prevent foreclosures, protect tenants, and combat mortgage scams.  This law:

• Protects loan servicers from lawsuits, many of whom will not modify mortgages fearing they will be sued by investors.
• Expanded the HOPE for Homeowners (H4H) program by lowering fees for homeowners and lenders alike, and giving lenders greater incentives to participate.  This program helps modify loans with the goal of lowering monthly mortgage payments.  Please visit the H4H website for more information by clicking here.
• Provided resources to the U.S. Department of Housing and Urban Development (HUD) to combat mortgage fraud, including additional staff and advertising to warn consumers about scams and inform them of legitimate foreclosure-relief services.
• Provided resources to HUD to advertise in languages that will raise awareness more broadly in communities across the nation.  This will help prevent fraud and provide homeowners with information on how and where to get government-approved assistance.
• Included revised legal protections for tenants of foreclosed homes.

Fraud Enforcement and Recovery Act
Mortgage fraud is one of the biggest factors of the current economic crisis.  Unfortunately, as the federal government increased efforts to help families losing their homes, the prevalence of fraud rose simultaneously.  There are many companies claiming to be government-approved and charging for services that should be free.  Further, these companies are also continuing to offer consumers extremely risky loans or tricking them out of their homes.  According to the Federal Bureau of Investigation (FBI), in 2001, 6,400 cases of fraud were reported across the country.  In 2010, the number of fraud cases had increased more than tenfold to 70,533 cases [FBI].  To resolve this problem, I helped lead the Senate to pass the Fraud Enforcement and Recovery Act of 2009, which President Obama signed into law.  This law:

• Provides critical funding and new tools that will allow law enforcement agencies, such as the FBI and HUD, to prosecute and punish those responsible for the mortgage fraud and corporate schemes that have hurt countless hardworking Americans and led to the worst financial crisis in decades.
• Increases resources to allow the U.S. Department of Justice to take fraud cases to trial.
• Applies federal regulations to all companies that sell mortgages.  Previously, the federal government could only regulate banks.
• Closes several legal loopholes that otherwise may allow individuals guilty of criminal conduct to evade prosecution.  Individuals who have engaged in corruption or deliberate criminal behavior should not be able to escape punishment on a technicality.
• Provides the Federal Trade Commission (FTC) funding to investigate subprime loans.  For example, a FTC investigation resulted in charges against a California company that allegedly charged Hispanic and African-American clients higher interest rates than white clients, even though they had the same qualifications [FTC].

If you think you are a victim of mortgage fraud, please contact the Nevada Attorney General’s Bureau of Consumer Protection at in Las Vegas 702-486-3194 or 775-684-1180 in Carson City.  A complaint form, as well as other valuable information on consumer protection, is also available on the Attorney General’s website at www.ag.state.nv.us.

The housing market plays a vital role in the financial sector and stabilizing this industry is a key component of our economic recovery.  As Nevada’s Senior Senator and the Senate Majority Leader, I am committed to doing everything in my power to provide Nevadan families with the relief they deserve and to protect the American Dream of homeownership.