Mr. President, I received recently a letter from Linda Frazier, a single mom who lives in Las Vegas with her three teen-aged children and at times has had to work two jobs that paid hourly wages. Linda told me how in recent years, both her…
Mr. President, I received recently a letter from Linda Frazier, a single mom who lives in Las Vegas with her three teen-aged children and at times has had to work two jobs that paid hourly wages.
Linda told me how in recent years, both her income and the value of her house have plummeted. She now fears hers will become the latest Nevada family swallowed up by this devastating housing crisis.
Her story is distressing. It is unacceptable that a hardworking American like Linda wakes up worried every morning about whether she can put a roof over her children's heads. But what struck me most is that she wrote to me: ``I'm about to lose my house, which is the way it is.''
It doesn't have to be the way it is. In a Nation this great and this strong, a family shouldn't have to lose its home when it plays by the rules. And that family certainly shouldn't surrender to thinking that having the American dream vanish is simply ``the way it is.''
But stories like hers happen every day, in every State. The victims of foreclosure include families who did everything right--they put money down
on their new home and took out a responsible mortgage, not one of those interest-only gimmicks.
Nevadans like Linda Frazier have endured an appalling number of foreclosures over the past few years. Just last month, about 20,000 Nevada families received a foreclosure notice. Last year, not a single state had a worse foreclosure rate than Nevada's--this crisis hit one in 14 households.
One of the most underappreciated side effects of this crisis is that the victims of foreclosure aren't just those who live in the foreclosed-upon house.
Vacant homes drive crime up and property values down. Just try putting up a sign that says ``for sale'' next to one that says ``foreclosed.'' The average price of a home in Las Vegas went down more than 31 percent between last February and this February, and more than 40 percent since prices peaked in 2006.
Last fall I walked with Mayor Oscar Goodman of Las Vegas through the hardest-hit neighborhood in the hardest-hit city in the hardest-hit state in the country. A resident there came up to us and told us that the value of her home dropped more than $100,000. She will never get back what she paid for it.
Unfortunately, her situation is now the rule, not the exception. The numbers are shocking: Two out of every three homeowners in Las Vegas owe more on their home than it's worth. The same is true for more than half of homeowners in Nevada, and for one in five across the country.
American homeowners are underwater, and it is our job to help them to dry land.
Last year, after a long struggle, we passed legislation that will help those at risk of losing their homes and prevent foreclosures from happening. We reformed the mortgage-finance industry and helped homeowners get mortgage counseling. We had to file cloture on 7 filibusters. I wish we could have done more.
Democrats insisted that last fall's rescue legislation gave the administration the authority to design other ways to help families, which led to the Obama Administration's Making Home Affordable program. That program continues to be improved, and I am hopeful that many Nevadans will take advantage of it.
Last week, we passed a bill to prevent and prosecute scam artists from preying on homeowners desperate for help. The Nevada Bureau of Consumer Protection receives nearly 100 complaints each month from consumers complaining of possible mortgage scams. The number of fraud cases reported nationwide has almost quadrupled in the past seven years: in 2001 there were 18,000; last year there were 65,000. In the Hispanic community, the number of fraud victims has been disproportionately high.
We will continue to do more to protect the victims of these scams and all struggling homeowners.
I want to thank Chairman Dodd for his tireless work in leading the Senate's response to the housing crisis. He shepherded major legislation through the Congress last year, and has done so again with the important bill we are about to pass.
So far, very few have participated in the Hope for Homeowners program, but thanks to Chairman Dodd's leadership, this bill improves it by lowering fees for home owners and lenders alike. It also gives lenders greater incentives to encourage their participation. More home owners whose mortgages are underwater could be placed in FHA-guaranteed mortgages.
This bill also gives the Department of Housing and Urban Development the resources it needs to help vulnerable and at-risk home owners. I am grateful to Chairman Dodd for incorporating into the underlying bill an amendment I authored that will stop mortgage scams.
I wish more Senators would have followed Senator Durbin's extraordinary lead and stood up to the banking industry so that we could have done more to help homeowners get relief through bankruptcy. It is simply unfair that struggling homeowners cannot access a bankruptcy court to climb out of a housing crisis like this, but owners of vacation properties can.
Just as our Nation's housing crisis is the root of our nation's economic crisis, these problems in Nevada have inflamed economic challenges in the State.
It is important that we be realistic. Neither these proposals nor any other piece of legislation will solve all of our problems. Forces outside the control of any legislature--whether State or Federal--will always combine to affect housing supply, prices and foreclosures.
Given the size and scope of the struggles too many Nevadans and Americans endure, it will take more time before housing normalizes again. But with this bill, we are working to hasten that day so that no family will ever accept losing its home as ``the way it is.''