McNerney: Today's Announcement is a Common Sense Step to Help Homeowners Facing Foreclosure

Press Release

Today, the lenders who collectively service nearly 50 percent of the nation's mortgages joined with the federal government in announcing an initiative called to help at-risk borrowers avoid foreclosure. The effort will temporarily suspend the foreclosure process for those homeowners who are 90 days or more in arrears on mortgage payments, offering them the opportunity to negotiate a new rate or payment plan with their lender. In response, Congressman Jerry McNerney (CA-11) released the following statement.

"In a softening economy, as adjustable rate mortgages reset upwards, families across the country are facing the difficult prospect of losing their homes to foreclosure. Around here we are all too familiar with how acute the problem is as Stockton continues to lead the country in foreclosure rates.

"In fact, in early December, I hosted a Foreclosure Assistance Workshop to pair families facing foreclosure with qualified housing counselors to provide advice and assistance. Over 500 people showed up, including many who arrived early and waited out in the cold to meet with a counselor.

"While some people took out loans they never should have, many were caught up in exaggerated promises and unwise lending practices that blossomed in recent years. Regardless of how families found themselves in this situation, it's clear both that the housing crisis we face is destroying communities and that homeowners who took out mortgages whose monthly payments have soared still have a contractual obligation to their lenders.

"That is why I was pleased to hear today's announcement that a number of our nation's biggest lenders will temporarily suspend foreclosure filings to give seriously overdue homeowners time to negotiate a lower interest rate or a new payment plan. This common sense step will give homeowners the breathing room necessary to work out a plan with their lender to honor their financial obligation. Importantly, it will also mean stability in our communities by ensuring families can stay in their homes.

"There is no magic bullet to solve the problems in the housing market. This agreement is a big step in the right direction. We must also continue to ensure, as I have done in Washington, that predatory lending practices are eliminated, that consumers are well-informed of their mortgage obligations, and that government housing entities, like the FHA, are modernized and reflect the current market realities."

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