Washington, D.C. – Congresswoman Carolyn B. Maloney, Chair, Joint Economic Committee (JEC) released the following statement commenting on today’s Congressional Oversight Panel (COP) report entitled “Foreclosure Crisis: Working Toward a Solution”:

“The COP report highlights the urgency of Senate passage of the Helping Families Save Their Homes bill that just passed in the House of Representatives yesterday.   More than 2 million homes have gone into foreclosure, and millions of other homeowners find themselves owing more to the bank than their homes are worth. People who are losing their jobs are also losing their homes.  Not surprisingly, states like California and Nevada which have extremely high foreclosure rates also have unemployment rates higher than the national average.  Without modifications to the bankruptcy code, lenders don’t have the incentive to negotiate with borrowers – leaving many borrowers underwater.  Given trends in the labor market, this current anomaly in the bankruptcy code is giving greater force to the foreclosure wave.”

The COP report notes that bankruptcy reform is the central tool in the Administration’s Homeowner Affordability and Stability Plan for addressing the problem of homeowners with negative equity in their homes.  The report says that “without the bankruptcy piece the Plan does not deal with mortgages that substantially exceed the value of the home, which could limit the relief it provides in parts of the country that have experienced the greatest price declines.”

This morning’s JEC hearing on the February 2009 employment situation with the Bureau of Labor Statistics Commissioner, Keith Hall, discussed how the labor market and housing crisis problems are intertwined.  More information about Chair Maloney’s statement and the hearing can be found at the JEC website.

The COP’s report can be found at the COP website. 

 

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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