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Turner joins fight to stave off home loss

He’s a co-sponsor of proposed U.S. House amendment.

Foreclosure totals mixed for area counties

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By Steve Bennish, Staff Writer Updated 2:25 PM Friday, December 11, 2009

UPDATE: Democrats fend off effort to kill consumer agency

EARLIER: U.S. Rep. Mike Turner, R-Centerville, is the only Republican signed on as a sponsor of an amendment to help bankrupt homeowners keep the roof over their heads.

The initiative, also sponsored by 10 Democrats, would allow judges to modify mortgage terms on primary residences when the homeowner is in bankruptcy. The option is commonly known as a “cramdown.”

The amendment has been added to the Wall Street Reform and Consumer Protection Act of 2009, a comprehensive measure sponsored by U.S. Rep. Barney Frank, D-Mass., aimed at curbing abuses that led to the 2008 economic meltdown and subsequent government bailouts.

The House is expected to vote on the Act today, Dec. 11. Turner’s amendment mirrors a bill the House passed March 5, which was defeated in the Senate.

“The current foreclosure crisis has affected many homeowners across the Miami Valley region,” Turner said. “Many homeowners have unsuccessfully attempted voluntary loan modification programs and are in imminent danger of losing their homes. I supported this amendment because it gives struggling homeowners an opportunity to establish a workable payment schedule with their financial institution.”

Turner noted that in the Dayton area, it’s estimated that 10,000 housing units have been abandoned because of the mortgage crisis.

“This legislation will help homeowners stay in their homes, and prevent more endangered neighborhoods from descending into blight,” Turner said. “This amendment is part of a solution to the housing crisis that will help sustain communities and preserve homeownership for struggling families throughout Southwest Ohio and across the country.”

Ohio Sen. Sherrod Brown, also a supporter, said the amendment “would help Americans hold onto their homes by allowing judges to modify their mortgages in a bankruptcy so that their monthly mortgage payments are more affordable, just as judges can now do for vacation homes.”

The American Bankers Association opposes the amendment, spokesman Peter Garuccio said, mainly because the association believes it will impose unforeseeable costs on lenders that will result in higher costs for borrowers.

Lenders could be in a position where they won’t know whether a home is worth hundreds of thousands of dollars less in the future. “That could mean everybody would pay more interest,” he said.

U.S. Rep. John Boehner, R-West Chester, opposes the Act in favor of a GOP proposal, the Consumer Protection and Regulatory Enhancement Act. He said the latter would require the government to “stop rewarding failure and picking winners and losers.

“With consumer spending just about frozen and unemployment near double-digit levels, the last thing we need are new layers of bureaucracy and burdensome regulations that restrict access to financial products and discourage economic growth,” he said.

U.S. Rep. Steve Austria, R-Beavercreek, voted no on the cramdown earlier this year, but now is looking at the entire reform bill, his office said Thursday. In general, however, he does not support a cramdown, spokeswoman Courtney Whetstone said.

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