Herb Kohl: “Today the Senate threw a lifeline to homeowners facing the specter of foreclosure. This legislation includes valuable…”

“Today the Senate threw a lifeline to homeowners facing the specter of foreclosure. This legislation includes valuable resources for communities, homeowners, and industry to combat the downturn in the housing market. In my home State of Wisconsin, foreclosures have risen at an alarming rate. Compared to last year, foreclosures have increased by 145 percent. Many of these foreclosed properties were connected with subprime loans with adjusting interest rates. A combination of lax lending standards and the creation of exotic financial products gave lenders the ability to offer people who would not qualify before the chance to own a home. However, there was little concern on whether or not the person or family would be able to sustain home ownership. Because of the irresponsibility of some lenders, families across the country have lost their homes and more are soon to follow if help does not come. One of the provisions included in the Foreclosure Prevention Act increases funds for housing counseling services. These nonprofit housing counseling agencies help homeowners connect to their lenders and renegotiate terms that will allow them to keep their homes. The money is estimated to help close to 500,000 families stay in their homes. Another very important provision provides $4 billion in community development block grant for communities to purchase and redevelop foreclosed-upon properties.”