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FOR IMMEDIATE RELEASE |
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State
Rep. Mark Longietti |
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Longietti: Pa. House moves forward with plan to protect homeowners from mortgage foreclosures
Package of bills includes Longietti-sponsored bill to crack down on fraudulent home appraisals
HARRISBURG, April 8 – As the national mortgage crisis continues to impact millions of Americans, state Rep. Mark Longietti, D-Mercer, announced the Pennsylvania House of Representatives has passed a package of bills that would address some of the root causes of the mortgage and foreclosure problems affecting Pennsylvania residents.
"The mortgage crisis has become one of the most pressing issues facing homeowners nationwide," Longietti said. "Statistics show that in February, the number of Pennsylvania properties with foreclosure filings rose 22 percent from 2007, and 43 percent alone since January. And we have nearly 25,000 existing adjustable-rate mortgages scheduled to reset this year. It seems that with each day, the crisis escalates. It is important that we take a look at the crux of the issue so we can help residents keep their homes."
Longietti is the prime sponsor of one of the measures in the package approved by the House today. The bill (H.B. 1081) would help crack down on fraudulent home appraisals, which many financial experts believe have played a major role in the current mortgage crisis. The proposal would provide additional reasons for denying, suspending or revoking an appraiser's certificate in Pennsylvania, including: denying a certificate if the applicant had his or her right to practice suspended or revoked by a government agency, or if an appraiser had been found guilty of involvement in a fraudulent appraisal.
"Based on statistics from 2006, many Wall Street and financial experts believe that mortgage fraud could total a record $4.5 billion, nearly a 100 percent increase from 2005," Longietti said. "It has played a major role in the financial crisis we are witnessing and forcing many banks to foreclose on the homes of honest, hardworking citizens. These schemes would not have worked if not for the willingness of certain unscrupulous appraisers to inflate the value of homes far in excess of what they were worth. This proposal would help prevent those who committed fraud in another state from coming to Pennsylvania and setting up shop here, which is especially important to border communities like Mercer County."
Longietti said his measure also would reform the State Board of Certified Real Estate Appraisers to provide additional checks against fraudulent appraisals. Currently, there are seven members of the board, including the Commonwealth's secretary, two public members and four state-certified real estate appraisers. Longietti's proposal would add to the board the attorney general and the secretary of Banking, as well a banker with substantial and recent mortgage lending experience and three additional state-certified appraisers.
"According to the FBI, the share of agents and analysts devoted to prosecuting mortgage fraud has risen to 28 percent nationwide," Longietti said. "By adding the state attorney general and the state Banking secretary to the state's appraisers’ certification board, we can provide teeth to the enforcement of fighting this crisis here in Pennsylvania."
Longietti said the proposed measures provide a comprehensive approach to the crisis by helping consumers and borrowers adjust to the instability of the housing market, tightening regulatory procedures and strengthening the enforcement of existing rules to protect against questionable lending practices.
"The package of bills we passed would take decisive steps in ensuring that homeowners and homebuyers are treated fairly and not exposed to harmful lending practices, as well as attempt to make the mortgage marketplace more predictable and stable," he added. "We need to make sure that lenders do not take advantage of the economic situation that many homeowners and homebuyers are in or capitalize on questionable behaviors.
"A few short years ago, we saw a booming housing market where property and real estate values peaked with demand," he added. "But now, economists estimate that the value of American residential real estate could fall by as high as $4 trillion. And the pains of this sharp turnaround are being felt by working-class homeowners. These proposals aim to help Pennsylvanians keep their homes and ride out this crisis."
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