Smith-Kerry provision will help keep low-income families in their homes
February 28th, 2008 – Washington, D.C – Oregon Senator Gordon Smith today continued his efforts to keep Oregon families in their homes and ease the skyrocketing rate of foreclosure across the country. Senator Smith urged the Senate Finance Committee to take a serious look at his proposal to address the subprime mortgage crisis. Roughly 2.5 million mortgages were in default in the third quarter of 2007 – a 40 percent increase from 2005.
“Across the country, families are facing ballooning interest rates and plummeting home values that threaten to put the family home on the auction block and swallow life savings,” Smith said. “Our bill will have a very real and direct impact on working families.”
Senator Smith and Senator John Kerry (D-MA) began working on a bill in December to stop the spread of foreclosures by providing options to obtain safe, fair mortgages. Under current law, state and local governments may issue bonds to finance new mortgage loans to first-time homebuyers. The Smith-Kerry provision would temporarily expand the use of this program to include refinancing of subprime loans.
According to a recent report by the U.S. Congress Joint Economic Committee, the number of subprime foreclosures in Oregon will total 12,600 by the end of 2009. Mortgages in delinquency in Oregon rose by nearly 50 percent between 2005 and the end of 2007.
Dr. David Seiders, Chief Economist of the National Association of Home Builders, spoke favorably of the Smith-Kerry provision at today’s hearing. The Finance Committee passed the provision last month with overwhelming bipartisan support as part of the economic stimulus package, though it was not included in the package that was signed into law
