Officials discuss mortgage problems
U.S. Rep. Melissa Bean said Monday she and officials in Lake County are working together to promote legislation and educational programs to help at-risk families avoid foreclosures.
Bean said she is supporting legislation targeting the mortgage industry.
"We want to establish more accountability, but we don't want to stifle capital for families with less than perfect credit from achieving the American dream of owning -- and staying in -- a home," Bean said after her Fall Leadership Summit with mayors, trustees and county officials in the 8th Congressional District.
In some Lake County towns, as many as 63 out of every 1,000 homes faced foreclosure last year. Data shows many towns have already met or exceeded last year's numbers.
Bean, a Barrington Democrat, serves Lake, McHenry and Cook counties and is on the House Subcommittee on Financial Institutions and Consumer Credit.
Legislation Bean said she supports includes the Federal Housing Finance Reform Act (HR 1427), which increases regulation and oversight of Fannie Mae and Freddie Mac and the Federal Home Loan Bank system. It increases loan eligibility in high-cost areas and allows loans to increase while meeting safety requirements by federal regulators. This bill is pending in the Senate.
"This is for the subprime homeowner, someone who is at higher risk," said Bean. "Sure, there are some people who just shouldn't be in the market. But there are others, who have less-than-perfect credit and can handle these loans."
In addition, the Expanding American Homeownership Act (HR 1852) updates the Federal Housing Administration to allow it to serve more subprime borrowers at affordable rates and terms. In Lake County, the eligible loan maximum is $275,200. If this bill passes, that limit would be $362,105. This also is pending action in the Senate.
Another bill, the Mortgage Forgiveness Debt Relief Act (H.R. 3648), prevents forgiven mortgage debts that borrowers have worked out with their lender from being considered as gross income for tax purposes. This bill is pending before the Senate.
Bean also is considering the proposed Financial Services Subprime Bill, which simplifies mortgage disclosure requirements so average borrowers can understand. It also would require licensing and oversight for all mortgage originators and mortgage lenders and outlaws certain predatory practices. This has yet to be introduced.
"There were a lot of predatory lenders out there taking advantage of these people and didn't care about foreclosing on them," Round Lake Beach Trustee Judy Armstrong said.