Washington, DC—Senate Majority Leader Harry Reid made the following statement today on the floor of the U.S. Senate before voting for the FHA Modernization Act that will help as many as 200,000 Americans at risk of losing their homes:
“I rise to express my optimism for the bill we are about to pass, and my appreciation that we have reached a point where we can get it done for the American people. Every day, the mortgage crisis grows worse. We’ve reached a point where hundreds of thousands of families have now either lost their homes or may lose them soon. Yet as bad as the crisis is now, there is reason to believe that we’re only in the early stages.
“Some may say if a borrower gets into financial trouble, it is their obligation and their alone to find a way out. I couldn’t disagree more. The costs of a foreclosed home impact all of us. Not just the borrower, but all of us. Families lose the roof over their heads and the equity they have gained. Neighborhoods suffer the loss of property values. Cities and towns lose tax revenue. Lenders and their shareholders lose, too, and it’s no exaggeration to say that the entire national economy is put at risk.
“We’re seeing those effects hit Nevada particularly hard, with the number of foreclosures since August of 2006 up more than 200 percent, and another 21,000 homes at risk by 2009. We’ve been working hard to help alleviate this problem at home. Last month, I organized a roundtable discussion in Reno with lenders, mortgage services, housing counseling agencies and other federal and local officials. And we’ve followed up with ‘mobile resource centers’ to bring foreclosure information straight into the neighborhoods where people need help.
“Taking these steps locally is a crucial part of the solution – but we need new laws at the federal level to give lenders the tools and flexibility to help people find ways to keep their homes. And as grim as things look today, they could get far, far worse. That’s why it’s so important that we act now, and I am glad to see that my Republican colleagues have finally heard that call and joined us to support this bill.
“Let’s be clear: the government can’t solve this problem alone – but we can help. When this bill becomes law, it will accomplish two key things: It will increase FHA loan limits at both the high and low ends and it reduces down payment requirements. The result will be a better loan option for families that are having trouble keeping up with their exploding mortgage payments resulting from “teaser-rate” mortgages. They will have the option of refinancing to an FHA-backed loan with the peace of mind that comes with it. And for future homebuyers, a fully backed FHA loan with honest, up-front terms, will help prevent crises like we now face, and ensure that more American families will experience all the safety, comfort and stability that comes with homeownership.
“The past decade has seen remarkable growth in American homeownership. What’s more, these gains have been enjoyed from coast to coast and among groups that have traditionally been shut out. The bill we are about to pass will help ensure that this progress continues. It is a great accomplishment for the Senate and an important step forward for the American people.”