John Edwards for President-Edwards Announces Plan To Protect Homeowners And Fight Predatory Mortgages

Edwards Announces Plan To Protect Homeowners And Fight Predatory Mortgages

Apr 4, 2007 3:15 PM

John Edwards for President
Apr 4, 2007

Davenport, Iowa – As part of his ongoing effort to expand and strengthen the middle class, Senator John Edwards today released an aggressive plan to end the harmful lending practices that have put millions of families at risk of losing their homes. At a town hall in Davenport, Iowa, Edwards called for strong national legislation to regulate mortgage abuses and prohibit predatory mortgages. He also proposed immediate steps, including bankruptcy reforms and the creation of a Home Rescue Fund, to provide relief for families who are struggling to keep their homes.

"This is about the future of the middle class," said Edwards. "While Washington turns a blind eye, irresponsible lenders are pulling a fast one on hard-working homeowners. Using deceptive practices, hidden fees, and abusive terms, they have already taken billions of dollars from hard-working homeowners, destroying their nest eggs in the process. For too many families, homeownership has become a risky gamble when it should be the foundation of economic security. It's time to put an end to the shameful lending practices that are compromising our strength as a nation."

Edwards believes that we must act now to prevent widespread foreclosures from devastating communities. Home foreclosure filings rose to 1.2 million in 2006—a 42 percent jump—due to rising mortgage bills and a slowing housing market. The increase in subprime loans and predatory mortgages, which carry abusive terms and excessive and hidden fees, has put more and more American families, especially families of color, at risk of ruining their credit histories and losing their homes. Additionally, economists are concerned that housing sector troubles could put downward pressure on consumer spending and the economy as a whole.

Edwards has proposed a plan to fight mortgage abuses and predatory lending and help families avoid foreclosure. Edwards' plan will:

Enact a strong national law, based on North Carolina's successful law, to prohibit the worst abuses in the mortgage market. The law will strengthen underwriting standards to ensure that borrowers receive suitable, affordable loans and ban kickbacks to mortgage brokers that encourage them to steer borrowers into more expensive loans.
Amend the bankruptcy code so families with "underwater mortgages" — mortgages where they owe more than their house is worth — can keep their homes if they pay off the full value of their homes on fair terms.
Create a national Home Rescue Fund to help families in danger of losing their homes. The fund would help homeowners negotiate with lenders and find refinancing options and would provide small loans to cover back payments.

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