I just received this from Senator Ken Salazar (D-CO) with regard to what the US Senate is workig on regarding helping people out of the foreclosure pandemic.
U.S. Senator Ken Salazar
Member: Finance, Agriculture, Energy, Ethics and Aging Committees
2300 15th Street, Suite 450 Denver, CO 80202 | 702 Hart Senate Building, Washington, D.C. 20510
For Immediate Release
Friday , February 22, 2008
CONTACT:Stephanie Valencia - 202-228-3630
Sen. Salazar Pushes For Urgent Action to Alleviate Colorado's Housing Crisis
DENVER, CO - As the rising rate of home foreclosure threatens thousands of Colorado homeowners, United States Senator Ken Salazar held a press conference today at Brother's Redevelopment, Inc., a local housing assistance agency that houses Colorado's Foreclosure Hotline, calling for urgent action to address the housing crisis in America. At today's press conference, Senator Salazar announced his support for The Foreclosure Prevention Act of 2008 (S. 2636), which was recently introduced in the Senate to help keep families facing foreclosure in their homes, help communities already harmed by foreclosure to recover, and help families avoid foreclosures in the future. The Foreclosure Prevention Act of 2008 represents a comprehensive approach toward addressing the housing crisis, and is scheduled to be considered on the floor of the United States Senate next week.
"The housing crisis in our nation is putting the American dream of homeownership in jeopardy," said Senator Salazar. "The housing crisis has had a significant impact on all Coloradoans, and merits urgent action. When we return to the Senate next week, we will continue the effort to reinvigorate our Nation's economy by passing this legislation and taking aim at the crisis that has been central to our Nation's economic woes."
The housing crisis has hit Colorado especially hard. The rising number of foreclosures have had a direct impact on home values in the state; according the Case-Shiller home price index, housing prices in the Denver area are down 5 percent from their peak in August 2006, and further declines may be on the horizon. In 2007, Colorado ranked 5th in the nation in foreclosures and in Colorado in 2007 foreclosures were up 30 percent over 2006 and 140 percent over 2005. During September of last year, 1 in every 376 houses in Colorado was in some stage of foreclosure.
In addition, Colorado's home building industry is suffering, and has responded to the economic situation by cutting production -- Colorado housing starts have declined by 36 percent since 2005. These statistics are especially troubling given the importance of the home construction to the Colorado economy. The National Association of Home Builders estimates that, in 2002, 6.77% of Colorado's Gross State Product (GSP) was directly accountable to home building, and another 12.71% was accountable to housing services, for a total housing contribution of 19.48% of GSP.
The site of today's press conference, Brother's Redevelopment, Inc., is a local non-profit housing assistance agency that also houses the Colorado Foreclosure Hotline, which has provided an increasing number of struggling Colorado homeowners with information on a borrower's options when facing foreclosure. Their foreclosure assistance hotline has (877-601-HOPE) provides an easy way for any homeowner in danger of delinquency or foreclosure to talk directly with a trained, professional housing counselor. Counselors offer free assistance to help homeowners understand their options, negotiate solutions, and find the best resolution for their particular circumstances. The hotline has been an enormous success; to date, more than 29,000 callers have phoned the Hotline seeking assistance or information-more than 1,700 per month.
The Foreclosure Prevention Act of 2008 (S. 2636)
I. Help Keep Struggling Families in Their Homes
Allow Housing Finance Agencies (HFAs) to Issue Bonds for Refinancings (increase current cap by $10 billion) - This provision will allow housing finance agencies to use proceeds from mortgage revenue bonds to refinance subprime loans, to provide mortgages for first-time home buyers, and for multifamily rental housing. Additionally, the increased lending activity supports economic growth by creating new jobs, generating federal, state, and local revenues, and inspiring home-related consumer spending.
Change Bankruptcy Code to Allow Judge to Modify Mortgage of Debtor - This title could help more than 600,000 financially-troubled families keep their homes by allowing them to modify their mortgages in bankruptcy. It eliminates a provision of the bankruptcy law that prohibits modifications to mortgage loans on the debtor's principal residence for homeowners who meet strict income and expense criteria. With this change, primary mortgages are treated the same as vacation homes and family farms.
II. Help Communities Harmed by Foreclosures Recover
Net Operating Loss Carry Back from Finance Stimulus Package - For companies losing money in this economic downturn, this proposal extends a provision that allows corporations to apply (or "carry back") their net operating losses to tax returns from prior years in which they were profitable, and receive any applicable tax refunds. Under current law, companies are allowed to carry their losses back only two years - this proposal would extend that period to five years for losses incurred in 2006, 2007, and 2008, effectively allowing companies to average out their good years and their bad years for tax purposes. This is particularly helpful for "boom-and-bust" industries such as the home construction industry.
III. Help Families Avoid Foreclosures in the Future