Oregon's Senator Jeff Merkley brought together national housing experts, financial professionals, and community members today in Portland to discuss solutions to the escalating mortgage crisis facing millions of American families.
Merkley and other participants at the Mortgage and Foreclosure Solutions Summit discussed ideas including allowing homeowners to renegotiate the terms of their loan as an alternative to foreclosure and the Homeowner Affordability and Stability Plan introduced today by President Obama. They also focused on the difficulty so many homeowners are having in renegotiating existing loans, given the reality that many of these loans have been repackaged and sold to third parties. Today, it is no longer the case that the transaction is between a bank and an individual - it can involve a number of different financial institutions each with an ownership stake in the mortgage.
"Thanks to these community and housing leaders, I'm armed with more information to keep families in their homes," Merkley said. "This economic crisis started in the broken housing market, and it's not going to end until we fix the housing market. I will bring the stories and suggestions shared today back with me to Washington as I work with the White House to craft policies that will stem the rush of foreclosures and address the underlying causes of the mortgage crisis."
More Americans lost their homes to foreclosure in 2008 than in any year since the Great Depression and with Americans currently losing their homes at a rate of almost 50,000 per week, economists are predicting millions more foreclosures over the next few years. These foreclosures are not only disasters for the families involved, but for communities, banks, and the entire economy.
National foreclosure filings, including default notices, auction sale notices and bank repossessions were 18 percent higher in January 2009 than in January 2008, according to Realty Trac, Inc. Realty Trac's analysis lists Oregon as the state with the fifth highest foreclosure rate in the country.
In January, more than 274,000 homeowners nationwide received at least one foreclosure related notice.
Earlier this year, the Obama Administration pledged - at Merkley's urging - to use $50 - 100 billion to provide direct mortgage relief to families at risk of losing their home. Today, President Obama unveiled the Homeowner Affordability and Stability Plan to assist millions of families in restructuring or refinancing their mortgages to avoid foreclosure.
"President Obama's plan to provide $75 billion for mortgage mitigation is a huge step towards fixing the mortgage crisis affecting millions of American families. Importantly, it contains an absolutely critical provision to allow bankruptcy judges to modify the terms of the mortgages. It never made any sense to treat yachts and ski lodges differently than a family's home," said Merkley. "As I continue to examine the details of the White House proposal, I will rely on the ideas outlined today in Portland as guidance in ensuring we implement the right plan to keep families in their homes."