California has been among the states hardest hit by the housing crisis. Senator Boxer has fought for policies to keep families in their homes, to promote access to affordable housing and to ensure responsible lending practices and greater transparency. To help homeowners facing foreclosure, Senator Boxer has worked on measures to allow homeowners to refinance or modify their mortgages so they can stay in their homes. She has also played a lead role in helping to stabilize neighborhoods by securing funding to allow local communities to buy vacant foreclosed properties that can become a magnet for crime and vandalism. Senator Boxer has worked to enact legislation to crack down on risky and abusive lending by lenders and banks, and to increase counseling for homeowners.

Protecting Homeowners

  • Addressing the Housing Crisis - After holding a series of housing roundtable discussions across California - attended by federal, state, and local officials along with community organizations, lenders, brokers, and realtors - Senator Boxer issued a report in January 2008 on the situation facing local communities and laid out a 15-Point Action Agenda to respond to the growing foreclosure crisis. Many of those recommendations ultimately become a part of the Housing and Economic Recovery Act of 2008 and other legislation.

  • Ensuring Greater Transparency for Homeowners - The Helping Families Save Their Homes Act of 2009 included an amendment by Senator Boxer requiring that homeowners be alerted within 30 days if their lender sells or transfers their home mortgage loan. Often mortgage loans are sold and transferred a number of times, making it difficult for borrowers to determine who owns their loan and who to contact with questions, problems or complaints if the loan servicer cannot help them. Senator Boxer’s amendment ensures that borrowers will always know who owns their loan and will help homeowners whose efforts to avoid foreclosure have been complicated because they were denied this information. The provision also allows for penalties on lenders who fail to provide such notification and on servicers who fail to provide the information upon request.

  • Expanding Refinancing Opportunities for Homeowners - After President Obama announced his Making Home Affordable plan to address the foreclosure crisis in March 2009, Senator Boxer wrote to the administration urging an expansion of refinancing opportunities to include borrowers living in areas where home values have declined the most dramatically. The Home Affordable Refinance program originally allowed responsible borrowers in Fannie Mae or Freddie Mac loans with a loan to value (LTV) between 80 percent and 105 percent to refinance their mortgages. Senator Boxer urged that the upper LTV limit be raised to 125 percent to assist millions of additional borrowers suffering from the greatest crisis of price declines and negative equity our nation has seen. In July, the Administration made this critical change to the program.

    In a follow-up letter, Senator Boxer urged the administration to speed up the implementation of these changes so that homeowners would not miss out on the opportunity to refinance their loans at a lower interest rate. Within two weeks, Fannie Mae moved up its implementation date one month earlier than previously announced.

  • Increasing Access to Housing Counseling – After seeing the success that many housing counselors were having in working with lenders to keep borrowers in their homes, Senator Boxer successfully advocated for the inclusion of $180 million in the “Housing and Economic Recovery Act of 2008” for nonprofits to help existing and future borrowers by providing foreclosure prevention activities, including counseling, legal services, training and capacity building. Senator Boxer also fought to ensure that California was getting its fair share of appropriated funds, and combined with an earlier round of funding, over $43 million for foreclosure mitigation activities has gone to California organizations to help keep families in their homes.

  • Helping Homeowners Modify Their Mortgages - Senator Boxer was an original co-sponsor of S.61, the Helping Families Save Their Homes in Bankruptcy Act, which would have amended the Bankruptcy Code to allow judges to modify unaffordable mortgages on a homeowner’s primary residence – the same power judges already have for vacation homes or investment property. Changing the Bankruptcy Code in this way would enable struggling families to stay in their homes and would also help to stem the rising tide of foreclosures while limiting further declines in neighborhood property values. 

Stabilizing Neighborhoods 

  • Protecting Neighborhoods - Following her housing roundtable discussions, Senator Boxer urged Senate leaders to increase Community Development Block Grant (CDBG) funding to address the high number of vacant foreclosed properties that have become magnets for vandalism and crime. The Housing and Economic Recovery Act of 2008 included $4 billion and the American Recovery and Reinvestment Act of 2009 included an additional $2 billion in emergency CDBG assistance for the Neighborhood Stabilization Program to combat blight by purchasing, rehabilitating, or demolishing foreclosed vacant homes. During Senate debate on the ARRA, Senator Boxer filed an amendment and worked with appropriators to direct funding to those areas hit hardest by the foreclosure crisis, including many California communities. The final conference agreement included clarifying language to “ensure that the grantees are in areas with the greatest number and percentage of foreclosures.”

  • Preserving Local Anti-Blight Measures - Senator Boxer also heard how several California communities were addressing this problem by passing ordinances requiring lenders to maintain foreclosed properties or face stiff penalties. The “Housing and Economic Recovery Act of 2008” also included a provision authored by Senator Boxer expressing the support of the Senate for a policy of noninterference regarding local government requirements that the holder of a foreclosed property maintain that property. 

Promoting Affordable Housing 

  • Raising Loan Limits - Recognizing that the high cost of housing in the state had excluded a majority of Californians from access to important benefits of loan programs available through the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac, Senator Boxer successfully fought to raise the permanent loan limits for these programs. The “Economic Stimulus Act of 2008” temporarily raised the loan limit for FHA from $362,790 to $729,750, and for Fannie Mae and Freddie Mac from $417,000 to $729,750, where they remain today. (The “Housing and Economic Recovery Act of 2008” later set the permanent loan limits for these institutions at $625,000, though the higher limits are still in effect.) These changes have provided for greater refinancing opportunities and lower costs on some loans, and enabled more borrowers in high cost areas to avoid the type of nontraditional and frequently abusive loans that led to the current crisis.

  • Increasing Access to Affordable Housing - Right now too many working families – about 71 percent of low income renters – are forced to spend more than half their income on housing. These families try to make ends meet by working multiple jobs, often at the expense of time for their children, overcrowding, or living in substandard housing that threatens their health. Senator Boxer co-sponsored key pieces of legislation that were incorporated into the “Housing and Economic Recovery Act of 2008” and the Helping Families Save Their Homes Act of 2009 that protected tenants and addressed the lack of affordable rental housing for low-income families, which is especially acute in California.

    The Housing and Economic Recovery Act created a new permanent affordable housing trust fund to fund the construction, maintenance and preservation of affordable rental housing for low and very low-income individuals and families nationwide in both rural and urban areas. In addition, it also provided a temporary increase in the Low-Income Housing Tax Credit and simplification of the credit to help put builders to work to create new options for families seeking affordable housing alternatives. The Helping Families Save Their Homes Act also required that renters in good standing be allowed to remain their home in the event of foreclosure, and that existing leases be honored. 

Ensuring Responsible Lending 

  • Banning Abusive Lending Practices - Senator Boxer was an original co-sponsor of The Homeownership Preservation and Protection Act of 2007 (S.2452), which would have banned some of the most abusive practices by the mortgage industry and required that a borrower's reasonable ability to repay a loan and associated costs be verified before the loan is made. The bill required mortgage lenders and home appraisers to act in good faith in all aspects of the home appraisal and mortgage process and prevent lenders from steering a client into inappropriate loans. S.2452 also would have prohibited the use of balloon payments and prepayment penalties in subprime and non-traditional mortgages, and increased funding for the FBI to pursue cases of mortgage fraud.

  • SAFE Mortgage Licensing Act of 2007 - Senator Boxer was a co-sponsor of the SAFE Mortgage Licensing Act of 2007, which was authored by Senator Feinstein and also was incorporated into the “Housing and Economic Recovery Act of 2008.” The provision establishes a nationwide loan originator licensing and registration system that will set minimum standards for loan originator licensing, substantially improving the oversight of mortgage brokers and bank loan officers. Senator Boxer also co-sponsored provisions in the bill that establish improved mortgage disclosure requirements that will help ensure that mortgage borrowers understand their mortgage loan terms.

  • Preventing Risky Behavior in Real Estate By Banks - Senator Boxer introduced the Community Choice in Real Estate Act of 2009 to clarify Congressional intent that real estate brokerage and management are not financial activities and prevent banks from expanding their business to act as real estate brokers and managers. This bill was subsequently included and signed into law as part of the FY09 omnibus appropriations bill.

    Following passage of the Gramm-Leach-Bliley Act in 1999, the Federal Reserve and the Treasury Department proposed rules in response to a petition by some financial services entities that would have allowed them to own and operate local real estate brokerage and property management companies. Permitting banks to engage in commerce could compromise their lending decisions and create conflicts of interest while restricting consumer choice and competition among mortgage lenders. In the wake of the damage caused to the financial system by deregulation of other firewalls between different financial activities, removing the separation between finance and commerce could cause additional harm.