OH-13 & 18: More From Sutton and Space on Mortage Crisis Legislation

Rep. Betty Sutton (D-Copley) has sent out a press release with more from her floor speech in support of H.R. 1852, passed by the House on Tuesday. The legislation would "revitalize" the Federal Housing Administration by increasing the range of borrowers eligible for FHA mortgage reinsurance and making other changes, including providing for financial counseling for borrowers and emergency housing grants. As Sutton notes, 1 in 10 Ohio homeowners with a mortgage is at least a month behind on payments, and 1 in 4 with a subprime loan is delinquent or in foreclosure. Here are her remarks on the floor:

The American Dream is in peril for many families in this country as foreclosures rise and dreams shatter. The American Dream means owning a home, belonging to a community, and being able to provide a safe and stable place for our families. But for too many families, that dream can be a nightmare when predatory lending practices and a complacent government get in the way. We in Congress can help working families take steps toward achieving the American dream, and that’s exactly what we’ve done.

My home state of Ohio has been rocked by problems with the national economy. In difficult times, the thing Ohioans should be able to count on is their homes. And yet Ohio has the highest rate of mortgages that were seriously delinquent or in foreclosure in the nation. While my constituents faced the horrible sinking mortgage market, the FHA was missing in action. This bill provides the help that should have been available years ago.

This country was built by working men and women. It is unacceptable that the American Dream should be constantly moved out of reach of the very people who make it possible. The Federal Housing Administration should be able to help those working families deal with predatory lenders and turbulent mortgage markets.

Rep. Zack Space (D-Dover) has also taken the lead on the mortgage crisis, supporting H.R. 1852 and introducing legislation that would limit the "foreclosure tax" (i.e, when a borrower goes into foreclosure and the house is sold below market value, the difference is treated as taxable "income" received by the distressed former homeowner). Space's press release offers this helpful summary of additional provisions of H.R. 1852 (it is a very long and complicated bill):

The Expanding American Homeownership Act raises loan limits for FHA-backed loans, boosts loan limits in high-cost areas, allows the agency to vary the premiums it charges borrowers based on their credit risk, modifies disclosure requirements to provide more information concerning mortgage choices, and allows for lower monthly payments for borrowers who make on-time payments for the first five years of a loan. It also extends the maximum loan term on FHA single-family loans to 40 years from 35 years.

In support of H.R. 1852, Space had this to say:

This legislation is a step in the right direction toward righting the problems of our nation's current housing market. Instead of borrowers turning to predatory lenders who are looking to profit off of others' misfortunes, families can finance their mortgages through the FHA. The FHA can serve subprime borrowers at better rates and provide fairer mortgage opportunities than predatory lenders. FHA mortgages are a safer bet and could prevent foreclosure in many cases. I am also very pleased this legislation contains provisions to make sure legal Americans are the only people who can take advantage of this program.