The following is cut directly from each campaigns website on how each candidate plans on dealing with the housing and mortgage crisis this country currently faces. I want this blog to be about why we would elect a candidate strictly based on where they stand in helping our industry improve.
Please comment if you have other sources of information to help us review where each candidate stands.
Protect Homeownership and Crack Down on Mortgage Fraud
Obama will crack down on fraudulent brokers and lenders. He will also make sure homebuyers have honest and complete information about their mortgage options, and he will give a tax credit to all middle-class homeowners.
- Create a Universal Mortgage Credit:Obama will create a 10 percent universal mortgage credit to provide homeowners who do not itemize tax relief. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.
- Ensure More Accountability in the Subprime Mortgage Industry:Obama has been closely monitoring the subprime mortgage situation for years, and introduced comprehensive legislation over a year ago to fight mortgage fraud and protect consumers against abusive lending practices. Obama's STOP FRAUD Act provides the first federal definition of mortgage fraud, increases funding for federal and state law enforcement programs, creates new criminal penalties for mortgage professionals found guilty of fraud, and requires industry insiders to report suspicious activity.
- Mandate Accurate Loan Disclosure:Obama will create a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower metric (similar to APR) for home mortgages. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.
- Create Fund to Help Homeowners Avoid Foreclosures:Obama will create a fund to help people refinance their mortgages and provide comprehensive supports to innocent homeowners. The fund will be partially paid for by Obama's increased penalties on lenders who act irresponsibly and commit fraud.
- Close Bankruptcy Loophole for Mortgage Companies:Obama will work to eliminate the provision that prevents bankruptcy courts from modifying an individual's mortgage payments. Obama believes that the subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law.
Hillary Calls On Wall Street To Address Housing Crisis
Hillary goes to the Nasdaq stock exchange today to call on Wall Street to help clean up the housing foreclosure crisis it helped create. Wall Street not only enabled reckless mortgage lending, it encouraged it - 1.8 million home foreclosure notices have been filed this year, a 74% increase from 2006. Now it's time for lenders, homeowners and investors to come together to solve this crisis and stem the tide of foreclosures.
Hillary will challenge lenders and financial institutions to take three immediate steps today: 1) Voluntarily support a moratorium of at least 90 days on home foreclosures; 2) freeze the fluctuating rates on subprime loans for at least 5 years until they can be converted into fixed rate, affordable loans; 3) Require regular status reports on the progress they're making in converting unworkable mortgages into loans families can afford so we have real accountability.
Hillary is proposing a comprehensive work out - not a bail out - that would end the foreclosure crisis. If Wall Street refuses to act, Hillary will propose legislation to tackle the problems in the housing market head on.
As we see growing economic challenges - from the housing crisis to rising energy costs-- it's clear that we need a leader with Hillary Clinton's strength and experience to create the change America needs. Hillary has proposed allocating up to $5 billion in immediate assistance to help communities and distressed homeowners weather the foreclosure crisis, and called for $1 billion in emergency energy assistance for families facing skyrocketing heating bills this winter.
FORECLOSURE MORATORIUM: Hillary will call for a moratorium on home foreclosures of at least 90 days so that a rate freeze can take effect and at-risk homeowners can get financial counseling to help them transition to affordable loans.
FREEZE ADJUSTABLE RATE LOANS:The rate freeze must last at least 5 years, or until subprime mortgages have been converted into affordable loans. A typical subprime adjustable rate loan is raising monthly payments by 30% to 40% for many families, causing a wave of housing defaults across the country.
REQUIRE ACCOUNTABILITY: Hillary will ask for regular status reports on the progress Wall Street is making in converting unworkable mortgages into loans families can afford.
Helping Americans With The Housing Crisis:
John McCain Is Proposing A New "HOME Plan" To Provide Robust, Timely And Targeted Help To Those Hurt By The Housing Crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.
Eligibility: Holders of a non-conventional mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.
How It Works: Individuals pick up a form at any Post Office and apply for a HOME loan. The FHA HOME Office certifies that the individual is qualified and contacts the individual's mortgage servicer. The mortgage servicer writes down and retires the existing loan, which is replaced by an FHA guaranteed HOME loan from a lender.
John McCain Calls For The Immediate Formation Of A Justice Department Mortgage Abuse Task Force.The Task Force will aggressively investigate potential criminal wrongdoing in the mortgage industry and bring to justice any who violated the law. The DOJ Task Force will offer assistance to State Attorney Generals who are investigating abusive lending practices.
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