Beyond the Mortgage Meltdown

The current — and predicted future — turmoil in the mortgage market highlights an important challenge to the American dream of homeownership: how to make certain that those who enter into homeownership are able to sustain that status, protecting family stability and building equity in a critical asset. Thirty years ago, those who owned homes had fixed rate mortgages and substantial equity, and foreclosure was a rare event. However, many Americans were denied the opportunity to become homeowners because of inefficient mortgage markets, underwriting based more on “rules of thumb” than analysis of the likelihood of loan repayment, and, frequently, discrimination.

By the end of the 1990s, positive changes in all three dimensions helped raise America’s homeownership rate, especially for lower-income and minority families. But in part because of excesses that have encouraged and enabled many to support homeownership based solely on debt, without building assets or equity, we are now at serious risk of losing many of those gains.

Both Congress and bank regulators are considering how to help those currently in trouble and to bring the mortgage industry back into better alignment with sound practices. Can potential homeowners and those who work with them use more direct saving, education and other strategies to return to sustainable homeownership while retaining, and in fact enhancing, broadened ownership opportunities? At this event, the panel of experts listed below offered both novel solutions and improvements to proven programs to boost savings and encourage asset-building through sustainable homeownership.

Video of this event is available at right, while an MP3 audio recording can be downloaded below.

The Congressional Savings and Ownership Caucus is Co-Chaired by Sen. Kent Conrad (D-ND), Rep. Jim Cooper (D-TN), Rep. Phil English (R-PA), Rep. Tom Petri (R-WI) and Rep. Earl Pomeroy (D-ND).

Participants

• The Hon. Jim Cooper (D-TN)
  U.S. House of Representatives
• The Hon. Phil English (R-PA)
  U.S. House of Representatives
• Conrad Egan
  President and CEO
  National Housing Conference
• Karen Murrell
  Senior Research Fellow, Asset Building Program
  New America Foundation
• Josh Nassar
  Vice President for Federal Affairs
  Center for Responsible Lending
• Ellen Seidman
  Director, Financial Services and Education Project, Asset Building Program
  New America Foundation
• Ken Wade
  CEO
  NeighborWorks America
• Berna Brannon
  Congressional Liaison, Asset Building Program
  New America Foundation