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Congressman Garamendi, Family at Risk of Foreclosure, Highlight Homeowner Assistance in Wall Street Reform Bill

July 7, 2010
Press Release


Homeowners Carmela and Troy Hess (Left) and Congressman
John Garamendi (Right) Explain Why Homeowner Assistance Found in
Wall Street Reform is Critical First Step to Protecting At Risk Homes

ANTIOCH, CA – Congressman John Garamendi (D-Walnut Creek, CA) and local homeowners Troy and Carmela Hess yesterday joined local officials, housing advocates, and realtors at a press conference at a foreclosed home in Antioch to highlight Wall Street reform’s assistance for homeowners. The Hess family has been working on a loan modification since June 2009 and is at risk of foreclosure without a modification.

"I stand here today with a good hardworking family trying to live the American dream – only to suffer a housing nightmare," Congressman Garamendi said. "The Wall Street reform bill passed by the House of Representatives last week will help rescue our economy from the greed of the big Wall Street banks. Even more importantly for the Hess family, it will also provide significant assistance for hundreds of thousands of homeowners trying to keep their homes."

On Wednesday, June 30th, the House passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. See below for a summary of its provisions assisting new and current homeowners.

"We have good credit; we pay our bills on time; we’re responsible members of this community," homeowner Troy Hess said. "I was a firefighter when we got this home, and because of an on-the-job injury, I’ve needed to change careers. All we’re asking for is a loan modification to make mortgage payments more manageable. Who does it help to kick us out of our home?"

"We want to work with our bank to save our home; we only wish they were willing to work with us," Carmela Hess added. "Thousands of families across this nation are in a similar situation, and action is required from Washington. The Wall Street reform bill is a good first step."

Mr. Hess is a fireman who became disabled after he and his crew found an unconscious person in a three-story apartment building, carried him to safety, revived him, and saved his life. In doing so, he severely injured his back, hip, and knee and had to be medically retired. This has severely limited their financial resources, and Mr. Hess now makes half of what he used to make. They have been homeowners for 13 years, have owned their present home for seven years, and have never been late on a payment. Despite this track record and despite a good credit rating, they’ve been declined loan modification requests nine times. If they do not receive a loan modification soon, they will be forced to sell their house.

The Dodd-Frank Wall Street Reform and Consumer Protection Act’s provisions for homeowners:

Mortgage Reform:

  • Require Lenders Ensure a Borrower's Ability to Repay: Establishes a simple federal standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.
  • Require Additional Disclosures for Consumers on Mortgages: Lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.
  • Prohibit Unfair Lending Practices: Prohibits the financial incentives for subprime loans that encourage lenders to steer borrowers into more costly loans, including the bonuses known as "yield spread premiums" that lenders pay to brokers to inflate the cost of loans.  Prohibits pre-payment penalties that trapped so many borrowers into unaffordable loans.
  • Establishes Penalties for Irresponsible Lending: Lenders and mortgage brokers who don’t comply with new standards will be held accountable by consumers for as high as three-years of interest payments and damages plus attorney’s fees (if any).  Protects borrowers against foreclosure for violations of these standards.
  • Expands Consumer Protections for High-Cost Mortgages: Expands the protections available under federal rules on high-cost loans -- lowering the interest rate and the points and fee triggers that define high cost loans.
  • Housing Counseling: Establishes an Office of Housing Counseling within HUD to boost homeownership and rental housing counseling.


Tackling the Effects of the Mortgage Crisis:

  • Neighborhood Stabilization Program: Provides $1 billion to States and localities to combat the ugly impact on neighborhood of the foreclosure crisis -- such as falling property values and increased crime - by rehabilitating, redeveloping, and reusing abandoned and foreclosed properties. 
  • Emergency Mortgage Relief: Building on a successful Pennsylvania program, provides $1 billion for bridge loans to qualified unemployed homeowners with reasonable prospects for reemployment to help cover mortgage payments until they are reemployed.
  • Foreclosure Legal Assistance: Authorizes a HUD administered program for making grants to provide foreclosure legal assistance to low- and moderate-income homeowners and tenants related to home ownership preservation, home foreclosure prevention, and tenancy associated with home foreclosure.