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U.S.
Senator Member of the Agriculture, Energy and Veterans Affairs
Committees |
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For Immediate
Release December 13, 2007 |
CONTACT:Stephanie Valencia – 202-228-3630 |
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| As Colorado Foreclosures Hit Record High, Senator Salazar Calls for Action WASHINGTON, DC – With recent news reports that the number of foreclosures in Colorado reached a new record high just nine months into this year, and as the national mortgage crisis continues to deepen, Senator Salazar called for action and urged the Senate Finance Committee to begin to identify possible legislative solutions at a hearing today on the national housing crisis. At today’s hearing, Senator Salazar highlighted the problem in Colorado, which, in recent years, has had one of the highest foreclosure rates in the nation. Senator Salazar called for serious deliberations on how to move forward on this issue in a way that helps American families in difficult financial positions and mitigates the impact of the foreclosure crisis on the economy as a whole. Below is Senator Salazar’s opening statement as prepared for delivery: “Our nation is in the middle of a crisis in the residential housing market. While the impact of this crisis is severe enough on the families who overextended themselves and on their neighbors who bought homes expecting their values to continue to increase, the most disturbing thing about the crisis is that it threatens to create a serious drag on the economy as a whole. “When our nation encounters a crisis of this scope, and when the government begins to contemplate ways in which it can be a part of the solution, we often hear cries about a potential “bailout.” In my view, this is not about bailing out people who made bad decisions. This is about two very specific things: (1) providing relief to the segment of the population that fell victim to the perfect storm of extremely cheap credit, overconfidence in the housing market, and unscrupulous or reckless practices of lenders and brokers, and (2) putting the breaks on a growing wave of foreclosures that is threatening to drag our whole economy into a recession. “In its early stages, the housing crisis hit my state of Colorado especially hard. Last spring, one in 339 homes in Colorado was in some stage of foreclosure – the highest rate in the nation. While Colorado’s national ranking has dropped over the past year and a half – due to much higher foreclosure rates in certain other states – foreclosures continue to grow in my state. According to the Colorado Division of Housing, foreclosures have increased by well over 100% since 2003. “There is no silver bullet to this problem. However, there are steps we can take now to provide some measure of relief to those who have already been affected, and to protect others from being in the same position in the future. Along those lines, I am pleased that Colorado acted quickly to create a mechanism to help citizens who were affected – or who might potentially be affected – by the foreclosure crisis. “Last fall, a consortium of government, private-sector and non-profit organizations launched the Colorado Foreclosure Hotline, which connects borrowers with non-profit housing counselors who can provide information on a borrower’s options when facing foreclosure. Counselors can also act as facilitators for communication between lenders and borrowers. “The hotline has proven to be an enormous success, fielding over 10,000 calls in the first six months following its launch. The hotline receives about 75 calls a day. According to a recent report by the Colorado Division of Housing, at least 4 out of 5 callers to the Colorado Foreclosure Hotline who meet with housing counselors avoid foreclosure. “While counseling services are part of the answer, there are things that those of us here in Congress – and on this Committee – can do to help provide direct financial relief to families facing foreclosure. There are two tax-related proposals in particular that both Congress and the Administration have put forward as possible solutions: tax relief for Americans who have had their debts forgiven, and an expansion of the use of private-activity bonds specifically dedicated for home loans. “I am interested in hearing more from our witnesses about these ideas, and about how to move forward generally on this issue in a way that helps American families who find themselves in a difficult position and mitigates the impact of the foreclosure crisis on the economy as a whole, without encouraging some of the shortsighted decisions that contributed to this crisis in the first place.”
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