| Helping Cuyahoga County Homeowners Hurt by the Mortgage Crisis | ||||
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More than 14,000 Ohioans in Cuyahoga County who were illegally foreclosed on may be eligible for relief after this month’s deal requiring banks to pay $8.5 billion to homeowners who were hurt by the mortgage crisis. U.S. Sen. Sherrod Brown visited Cleveland to discuss the settlement and additional steps to address problems in the mortgage servicing industry. He was joined at Community Housing Solutions by Carla Martin, a Cuyahoga County homeowner whose home was in unlawful foreclosure.
Sen. Brown also sent a letter today to the federal banking regulators and the U.S. Department of Justice [7] urging them to prevent financial companies from taking tax deductions as part of their legal settlements. Under current law, companies are able to take advantage of tax rules to deduct from their federal taxes the full value of any settlement payouts.
“While the settlement reached can in no way make up for reckless actions taken by mortgage servicers that harmed families and our economic recovery, it is one step forward,” Sen. Brown said. “But it’s simply unacceptable that these Wall Street banks can write off these mortgage settlements, shifting the cost to taxpayers. Banks that take a family’s home because of errors or fraud should not get a tax deduction and a slap on the wrist. Breaking the law should not be a business expense.”
Foreclosures—which drag down housing prices and hurt borrowers, even ones who are current on their mortgages—have been responsible for the slow housing market recovery. Last week, federal regulators and 10 lenders reached an agreement to address the large number of unlawful foreclosures that occurred when banks used illegal practices—such as “robo-signing”—to initiate foreclosure proceedings or failed to offer mortgage modifications or other measures that could keep Americans in their homes. Nearly 96,000 Ohioans, including more than 14,000 people in Cuyahoga County, are eligible for payments and loan modifications averaging $2,125 per homeowner under the deal.
Andy Nikiforovs, executive director of Community Housing Solutions, a Cleveland homeowner advocacy and counseling organization, also attended the event.
"We are so thankful for Sen. Brown's consistent advocacy for Ohio homeowners and his commitment to ensuring that future borrowers are not victims of fraud," said Andy Nikiforovs, executive director, Community Housing Solutions. "Although we try to help as many northeast Ohio families stay in their homes and maintain their financial solvency, it is critical that protections are in place to prevent lenders from taking advantage of Ohio homeowners. We are committed to helping residents become, and remain, successful home owners."
Earlier this week, Sen. Brown sent a letter to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve [8] calling on the regulators to ensure that adequate relief is provided to all homeowners who suffered abuses in the foreclosure process, particularly low-income and minority homeowners who may not have filed a claim in the initial Independent Foreclosure Review (IFR) process [9]. He also asked the OCC and Federal Reserve to continue their work to address abuses in the foreclosure process.
Sen. Brown is working to prevent the housing crisis from undermining economic recovery efforts. He will call for passage of the Foreclosure Fraud and Homeowner Abuse Prevention Act [10]. This legislation would expand access to foreclosure prevention services, while increasing protections for homeowners and investors in mortgage-backed securities.
The full text of the letter is available here [11].
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