Help!

The federal government has stepped in recently with bailouts for the big Wall Street firms like Bear Stearns, Lehman Brothers and Goldman Sachs, but as usual, they are not interested in helping regular Americans. The present economic crisis will likely have enormous impacts on the average American family. Analysts anticipate that two million American families will lose their homes over the next two years, and 40 million of their neighbors will see their home values decline due to projected foreclosures.

Unfortunately, very few homeowners who cannot pay their mortgages will be able to sell or refinance; loan servicers who could modify loans to make them more affordable just aren’t doing so in sufficient numbers. Unless Congress takes action quickly, these families will lose homeownership, surrounding neighborhoods will lose property value, and the entire economy will suffer.

In the coming weeks, the Senate will take up S. 2636, “The Foreclosure Prevention Act.” This legislation would provide comprehensive remedies to the current foreclosure crisis by providing greater resources for foreclosure counseling, allowing bankruptcy judges to modify loan terms for principal residences, and extending tax-exempt bonds to be used to refinance subprime loans.

In particular, S. 2636 would eliminate an inequity in the bankruptcy code that currently grants protections for vacation homes, yachts and family farms but denies borrowers similar protections for their primary residence. More important, this provision of the bill would help low and moderate income families save their homes, without any cost to the Treasury, and ensure that lenders recover at least what they would in foreclosure.

We must send a message to our Senators and urge them to support S. 2636, “The Foreclosure Prevention Act.”

More information about the Foreclosure Prevention Act and the broader issue of predatory lending, is available on the Center for Responsible Lending’s web site.