Mayoral Forum with Congresswomen Melissa Bean

Two days ago Congresswomen Melissa Bean held a Summit at the Round Lake Police and Public Works meeting room with the Mayors of some Lake County municipalities to discuss the foreclosure issue and some of the steps she and the government are taking on this issue.

I have been talking to her and her staff about this issue for some time, and the Congresswomen has been taking some impressive steps on attempt to help homeowners. The congresswomen has been incredibly receptive towards these issues and I think she has a firm grasp on how we can prevent and assist people suffering from losing homes and facing financial ruin. Here is a partial list of some of the things the Congresswomen has been working on:

1. Congress Has Held Several Hearings on the Status of the Mortgage Industry specifically focusing on Predatory Lending, the Role of the Secondary Mortgage Market, Government Sponsored Entities (GSE) Reform and FHA Reform.
   

2. Through Hearings and Working with the regulators and the industry, Congress has taken actions already that will help troubled borrowers stay in their homes:
   


1. Clarified that banks could use their discretion to avoid foreclosing on borrowers
   
2. Expanded the flexibility of servicers to rework mortgages
   
3. Raised awareness among borrowers encouraging them to proactively seek help from their lender of HUD certified credit counseling service through organizations like the Homeowner Preservation Foundation.
   

3. In addition the House of Representatives has passed GSE Reform, FHA Modernization Legislation and Mortgage Forgiveness Debt Relief.


4. The GSE Reform will increase the liquidity in the mortgage market, which in light of the still lingering effects of the liquidity crisis in August, is very much needed to help rebound the Housing industry.


5. Congresswoman Bean is working to expand the ability of Fannie Mae and Freddie Mac to provide additional liquidity to the market


6. Legislation was introduced by Congresswoman Bean last week that would temporarily increase the cap of Fannie and Freddie’s portfolios by 10 percent so they can inject more liquidity into the market.


7. The FHA Modernization legislation will update the FHA program to serve subprime borrowers at affordable rates and terms, recapture borrowers that may have received risky loan products in recent years and offer refinancing opportunities to borrowers currently struggling.


8. In particular it will increase loan limits allowing more borrowers to participate, lower down payment requirements and direct FHA to provide loans to higher risk but qualified borrowers.


9. The Mortgage Forgiveness Debt Relief Act will provide tax relief to families on mortgage debt that is forgiven when a borrower and lender rework mortgages.


10. The House Financial Services Committee (Congresswomen Bean is a member) is work on a a bill that will:
1. require clearer mortgage disclosure requirements that average borrowers can fully understand
   
2. Curb predatory practices: Congresswomen Bean is considering an Amendment that would
1. either encourage or require loan counseling for negative amortization loans similar to the counseling individuals receive when taking out a reverse mortgage
   
2. provide options with reasonable protections for borrowers who may be trapped in a resetting ARM.
   

3. Beyond that the bill will likely require proper licensing and oversight for all mortgage originators and all lenders. Illinois is a good example of how to ensure all mortgage originators are appropriately licensed and regulated.
   


4. She is personally looking into whether there can be some sort of notification to a borrower when his or her loan is discounted in the secondary market due to the inherent risk of taking on that mortgage.