Due to past government interference in lending conditions and the current state of the economy, specifically the housing markets, government action is necessary to correct the mistakes of the past.
I would like to contrast two proposals for addressing the foreclosure crisis: the recent proposal from the Obama administration, and H.R. 230 as introduced by Congressman Dennis Cardoza.
Unlike the Obama plan, the Cardoza legislation would allow the refinance of owner-occupied homes even if they are upside-down by more than 5 percent. It's estimated that one in five homeowners in Central California are upside-down by more than 5 percent.
The Cardoza legislation would reduce the interest rates of homeowners to a flat 4.0 percent for a term of 30 to 40 years. The Obama plan would only reduce interest rates to their current levels. And H.R. 230 is not restricted to only those homeowners who are currently behind or at risk of falling behind on their mortgage, any homeowner may qualify for the Cardoza plan.
While the Obama plan is a small step down a very narrow path, H.R. 230 by Congressman Cardoza has significant and widespread benefits. By casting a wide net, the Cardoza plan has two positive and immediate impacts.
First, those who are behind on their mortgage payments will have their payments reduced and increase the likelihood that they will be able to keep their homes. Second, those who are not now, and likely would not be, in danger of losing their home will still see a reduction in their mortgage payments, thereby giving them more money available for immediate purchases in our depressed economy.
As the CEO of the Building Industry Association of the Delta, I strongly encourage the support of H.R. 230.
Building Industry Association of the Delta