Another foreclosure bill is being debated upon by government officials while homeowners continue losing their homes to the housing crisis. Sen. Richard K. Durbin’s Helping Families Save Their Homes in Bankruptcy Act was placed before the Senate Judiciary Committee for another perusal. The Illinois Democrat’s bill failed to garner support from Congress last year.
During the hearing, witnesses Sheriff Thomas J. Dart of Cook County in Illinois and Mortgage Bankers Association Chairman David G. Kittle exchanged arguments on whether to change bankruptcy laws as the bill suggests. If approved, judges would have the right to adjust mortgage rates of troubled homes as a solution to foreclosures.
Dart described the stunned expressions of homeowners when they learned of their eviction. Others would even go home after work just to see their belongings on the sidewalks and their children with nowhere to stay.
Houses which once lined neighborhoods are now boarded up or scheduled to be demolished. According to Dart, he had evicted 1,771 because of the foreclosure problem, and had 4,500 families more for this year.
Meanwhile, Kittle argued that helping homeowners run away from bad debts would affect everyone else. Homebuyers would be made to pay more fees and interest rates, and bigger down payments by lenders if Durbin’s proposal is approved. He estimated that a $295 monthly tax on homeowners if lenders would be made to absorb more mortgage debt.
This would also lead to more foreclosures as homeowners file for bankruptcy. He cited the same reasons for opposing the federal government’s $700 billion budget to bailout financial institutions. For Kittle, it is inevitable that some people and businesses would have to fail.
If the crisis continues, 6.5 million Americans, or one out of 8 homeowners, are estimated to lose their homes to foreclosure in the next five years.
Among the few supporters of Durbin’s anti-foreclosure bill has been Sen. Patrick J. Leahy, the Senate Judiciary Committee Chairman.
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