Fix Mortgages for Families and Stabilize the Economy!

First, Congress should give the Federal Housing Administration the authority and funding to guarantee subprime loans at risk of default. This encourages loan restructuring for homes "under water," protects our economic base and keeps families in their homes. Voluntary efforts announced by lenders to date clearly are not working and not enough. Millions of families continue to face loss of their homes every day.

Second, Congress should require those who service loans to consider all available and reasonable alternatives before going to foreclosure. Other loss mitigation measures can be more beneficial to lenders and borrowers, and produce fewer adverse impacts on our neighborhoods and the economy as a whole.

Third, to minimize the impact of the recent mortgage crisis on our neighborhoods, Congress should provide resources to rebuild neighborhoods. This means cleaning up vacant lots and rehabilitating foreclosed homes.

Fourth, and importantly, government resources and short term crisis mitigation efforts will be wasted if Congress does not take steps to prevent abusive and predatory lending practices that contributed to this crisis. Congress must strengthen laws to protect consumers against from unfair lending practices. Among other reforms, prepayment penalties should be banned and brokers should be prohibited from steering consumers into high-cost loans when they qualify for more favorable terms. And, importantly, underwriting standards should be based on the consumer's reasonable ability to repay the loan.

Finally, whatever Congress does, it should not prevent the states from taking steps to protect their own homeowners.

These are just a few steps that Congress should take now to deal with the current crisis and deter dangerous lending practices to prevent crises from occurring. Please cosponsor and support legislation that includes these important provisions.

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Sincerely,

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