John Sarbanes: “Today Senator Mikulski, Senator Bond, and I, along with a number of our colleagues, are introducing, 'The Credit Watch…”

“Today Senator Mikulski, Senator Bond, and I, along with a number of our colleagues, are introducing, 'The Credit Watch Act of 2001,' a bill that will authorize the Federal Housing Administration (FHA), to identify lenders who have excessively high early default and claim rates and consequently terminate their origination approval. This legislation is necessary to protect the FHA fund and take action against lenders who are contributing to the deterioration of our neighborhoods. A rash of FHA loan defaults have led to foreclosures and vacant properties in cities around the country. In Baltimore, the effects of high foreclosure rates are acute. In some neighborhoods, there are many vacant foreclosed homes within just a few blocks of each other. This can often be the beginning of a neighborhood's decline. The high volume of vacant properties creates a perception that both the property and the neighborhood are not highly valued. In turn, these neighborhoods deteriorate physically and often attract criminal activity. It's like a rotten apple in a barrel. The rundown appearance of one home spreads to the surrounding neighborhood. Stabilization and revitalization efforts are undermined by the presence of abandoned homes.”