John Kerry: “it is becoming more difficult for a middle class family to purchase a home. Last week the Senate Finance Committee held…”

“it is becoming more difficult for a middle class family to purchase a home. Last week the Senate Finance Committee held a hearing on middle class economic issues. We learned from the witnesses that families are struggling because their fixed costs are greater and one of these fixed costs is housing. Professor Elizabeth Warren testified that houses purchased now are only slightly larger than those purchased in the 1970's, but the median mortgage payment is 76 percent larger than a generation ago. Today, there are serious problems in our mortgage lending market which need to be addressed. Too many families are unable to make the monthly mortgage payments on their homes. Foreclosure rates are increasing. Some homeowners who are facing foreclosure have received what are known as ``subprime'' loans which allow an adjustable rate of mortgage interest or a break on payments during the first years of the mortgage. The ``subprime'' lending market has been an important tool to allow people with poor credit histories to obtain access to credit including mortgages. However, in recent years some lenders have used these ``subprime'' mortgage loans to put homeowners into mortgage products with high interest rates that increase after a short period of time. Additionally, some homeowners have opted to buy homes they could not afford by using the ``subprime'' loan market.”