By Beth Malone

We’re in a housing crisis – one that hasn’t even hit its peek. The middle class is starting to feel the direct effects of foreclosure as the balloon that is their adjustable rate loan, bursts. That means more foreclosures to come in 2010.

By now we realize that foreclosures affect us all, not just those who default on a high-interest loan and lose their home as a result.

Our property values drop because foreclosed upon homes may stay vacant for a period of time and fall into disrepair. Our local governments then have difficulties raising revenue and enforcing the property code – meaning local economies struggle.

In order to prevent this catastrophic event from occurring again – and the free market is a cyclical machine – we need to reform lending. Plain and simple.

In 2009, state lawmakers had a chance to pass reform – they didn’t. SB 57 is up again in 2010 and we’re hoping the mistake won’t repeat itself.

By putting common sense underwriting standards into law, SB 57 will reduce foreclosures and ensure that the housing market in Georgia is stable.

Key Provisions of SB 57:

• Bans prepayment penalties on subprime loans. A high-cost loan should be a bridge to better financing, not an anchor to high-interest debt.
• Bans broker “yield spread premiums”, otherwise known as broker kickbacks, on subprime loans.
• Designates mortgage brokers as agents of borrowers.
• Requires that lenders determine a borrower has the ability to repay for subprime loans. This will help keep people from entering into loan agreements that they cannot afford to repay.

Holidays are approaching fast, just as they do every year. Its already stressful to think about buying gifts and celebrating when so many of us are truly struggling to make ends meet.

And even more families – folks that go to our churches and shop at our grocery stores – are fearful that they may not even have a house to go home to for the holidays. That’s the irony here.

Call us for more information or contact your state representative.