WASHINGTON, D.C. – Today, in advance of the Senate Banking Committee’s markup of housing finance reform legislation, U.S. Sen. Sherrod Brown (D-OH) filed several amendments that would help protect homeowners and improve local neighborhoods. Following the introduction of his amendments, Brown offered the following statement:
“Housing finance reform is about protecting homeowners and improving our local communities,” Brown said. “We must ensure homeowners have access to affordable loans, are protected from unfair fees, and can work with their lenders to stay in their homes or sell their property. Our communities also need the resources to address vacant homes that drag down property values and degrade the safety of our neighborhoods.”
Brown filed amendments that would:
- Increase access to housing counseling for struggling homeowners. Brown’s amendment #53 would require the newly created housing finance agency, the Federal Mortgage Insurance Company (FMIC), to consider a servicer’s history of encouraging borrowers to work with housing counselors. The FMIC would also be required to encourage and incentivize borrowers—and any approved servicers or parties guaranteeing or holding the loans—to work with approved counselors.
- Brown has long championed housing counseling for Ohio homeowners. Earlier this year, Brown urged the Senate Appropriations Committee to fully fund the National Foreclosure Mitigation Counseling Program as well as the U.S. Department of Housing and Urban Development’s (HUD) Housing Counseling Assistance Program, both of which provide housing counseling.
- Protect borrowers from unfair and abusive fees. Brown’s amendment #54 would ensure that loan payments aren’t counted as late if they are mistakenly sent to the wrong servicer; prevent new servicers from tacking on fees during a transfer; and require new servicers to list all charges due as of the date of transfer, including fees, so that borrowers know how much they owe and who to pay.
- Brown’s amendment is similar to a provision in the Foreclosure Fraud and Homeowner Abuse Prevention Act, which he introduced in 2011 to expand access to foreclosure prevention services, while increasing protections for homeowners and investors in mortgage-backed securities.
- Prevent servicers from having a financial interest in increasing borrowers’ costs. Brown’s amendment #55 would eliminate the conflict of interest that arises when servicers help a borrower complete a short sale, reduce a homeowner’s principal balance, or foreclose.
- Ensure servicers are qualified. The reform bill, as it stands, would allow all loan servicers currently approved by Fannie and Freddie to become automatically approved servicers in the new system. Brown’s amendment #56 would ensure that loan servicers approved under GSE reform have proved that they can adequately serve borrowers under the new system.
- Improve the short sale process. Brown’s amendment #57 is based on legislation he co-sponsored, the Prompt Notification of Short Sale Act, which would improve the housing market by requiring servicers to respond to short sale requests within 30 days and give an answer within 60 days. While the Federal Fair Housing Act (FFHA) independently includes this requirement, Brown’s legislation would expand this language to all loans.
- Fund neighborhood revitalization and allow for appropriate demolition. Brown’s amendment #58 would allow money from two of the three funds created by housing finance reform to be used for neighborhood revitalization, including demolition. Brown’s amendment would further require that 20 percent or $100 million (whichever is greater) from one of these funds to be used towards that purpose.
- This builds on Brown’s efforts to allow $60 million in Hardest Hit Funds (HHF) be allocated to Ohio communities to demolish vacant and abandoned properties. These funds represented a portion of the $570 million in Ohio HHF that Brown helped secure in 2010 as a member of the Senate Committee on Banking, Housing, and Urban Affairs.
- Provide additional financing for supportive housing for persons with disabilities. Brown’s amendment #59 would identify supportive housing for people with intellectual and developmental disabilities as an underserved housing market. This would help facilitate financing for permanent supportive housing for people with intellectual or physical disabilities.
- Brown previously supported housing funding for people with disabilities in 2014 and 2013 letters to the Senate Appropriations Committee.
- In 2012 Brown sent a letter to FHFA asking that it provide additional financing through the Group Home Mortgage Program for organizations that are helping the disabled.