February 13th, 2008 – Washington, D.C. – To prevent the rise of foreclosure marketing scams aimed at America’s seniors, Senator Gordon H. Smith (R-OR) examined fraudulent activity following the subprime mortgage crisis in the Senate Special Committee on Aging today. The hearing, “Foreclosure Aftermath: Preying on Senior Homeowners,” focused on strategies to help homeowners avoid foreclosure and potential fraud.
“In 2007, the number of foreclosures hit an all-time high, with 405,000 homeowners nationwide losing their homes,” said Senator Smith. “For con artists seeking prey, the high rate of defaults provides a target rich environment. It is unfortunate that while facing the challenge of foreclosure, homeowners also must be on the lookout for unscrupulous individuals who seek to take financial advantage of them.
“While these cons are not exclusively aimed at the elderly, older Americans are often prime targets because they typically have significant equity built up in their homes and are often on fixed incomes. These scams cannot be tolerated. Our consumer protection laws must be enforced and those perpetrating the crimes must be prosecuted.”
To help stop the spread of foreclosures, Senator Smith introduced legislation (S. 2517) with Senator John Kerry (D-MA) to help people who may face foreclosure to stay in their homes and at the same time provide stimulus to the housing industry. The legislation would give people who are at risk of default the option to obtain safe, fair mortgages. Under current law, State and local governments are permitted to issue tax-exempt bonds to finance new mortgage loans to first-time homebuyers. Senator Smith’s bill would temporarily expand the use of the program to include refinancing of existing subprime loans.
Senator Smith also voiced his support for outreach and education initiatives that inform seniors about their options when faced with a home foreclosure, and provide information to protect themselves from fraudulent mortgage schemes.