Scotsman Guide - November 2008 Residential Edition

By Darrick Meneken

With Election Day arriving Nov. 4, we’ve already heard a lot about the major-party presidential candidates. But where do they stand on mortgage-industry issues? Here’s what they’ve said on the record.

Helping Hands
Each month, Helping Hands features a
mortgage professional or group that has
volunteered to lend a hand to others in need
Sen. John McCain
(R-Ariz.)
Sen. Barack Obama
(D-Ill.)

By Ivanna C. Sukkar

Name Sharbel Shamoon, vice president of sales, American Street Mortgage Co.

Economy

The action Congress took … to address our financial crisis was a tourniquet, but not a permanent solution. Our economy is still hurting. … We need to restore confidence in our economy and in our government. (Speech in Albuquerque, N.M., Oct. 6)

The rescue package … is not the end of our efforts to deal with the economy; it’s just the beginning. … We’re going to have to move on an aggressive plan to deal with some of the underlying structural problems in the economy. (Interview in Asheville, N.C., Oct. 6)

Market reforms

The role of government is to help the truly needy, prevent systemic economic risk and enact reforms that prevent the kind of crisis we are currently experiencing from ever happening again. Those reforms should focus on improving transparency and accountability in our capital markets. (“Statement By John McCain on the Housing Crisis,” March 27)

It’s time to get serious about regulatory oversight. Over the last few years, commercial banks and thrift institutions were subject to guidelines on subprime mortgages that did not apply to mortgage brokers and companies. When it comes to protecting the American people, it should make no difference what kind of institution they are dealing with. (Speech in Golden, Colo., Sept. 16)

Fannie Mae and Freddie Mac

Project American StreetBall Classic charity basketball tournament and silent auction

Site Chicago

How This past Aug. 2, American Street Mortgage partnered with the Latin United Community Housing Association (LUCHA) to host the American StreetBall Classic charity basketball tournament and silent auction in downtown Chicago.

American Street donated a portion of the event’s proceeds to LUCHA, a U.S. Department of Housing and Urban Development-certified counseling agency that offers housing-related services to Chicago-area residents.

We will make sure that they are permanently restructured and downsized and no longer use taxpayer backing to serve lobbyists, management, boards and shareholders. ( The Wall Street Journal, Sept. 9)

Going forward, we need to replace Fannie Mae and Freddie Mac as we know them with a structure that is focused on helping people buy homes — not engaging in market speculation. (Speech in Golden, Colo., Sept. 16)

Lenders’ role

Lenders who initiate loans should be held accountable for the quality and performance of those loans; and strict standards should be required in the lending process. (Speech at Orange County, Calif., Hispanic Small-Business Roundtable, March 25)

They should actively look at all borrowers, offer workouts and reduce the principal on mortgages in trouble. (Speech at Cooper Union, N. Y., March 27)

Foreclosure prevention

Sharbel Shamoon (center), vice president of sales for American Street Mortgage Co., presents Latin United Community Association Director of Marketing and Fundraising Gabriela Roman (left) and Executive Director Juan B. Rivera with a check from the proceeds of American Street’s Aug. 2 basketball tournament and silent auction. Photo: American Street Mortgage Co.

I’d like for you to be able to go down to the post office and get an application that applies for an FHA 30-year guaranteed loan at the new value of your home and that you have those payments adjusted to that level so that you can afford the payments to remain in your home. (John McCain Virtual Town Hall Meeting, Aug. 8)

I’ve … proposed a H.O.M.E. [Homeowner Obligation Made Explicit] Score system that would create a simplified, standardized metric for home mortgages … allowing prospective buyers to easily compare various mortgage products so they can find out whether they can afford the payments. (Speech at NASDAQ, Sept. 17, 2007)

Mortgage fraud

Our regulatory system must protect consumers and investors by punishing individuals who engage in fraud, break contracts or lie to customers — like the predatory lenders who know you can’t afford an adjustable-rate mortgage but mislead you into signing one. These actions are criminal, and the people who commit them should be behind bars. (Speech in Green Bay, Wis., Sept. 19)

I’ve proposed updating the current mortgage rules to establish a federal definition of mortgage fraud and enact tough penalties against lenders who knowingly act in bad faith. … For homeowners who are victims of fraud, I’ve proposed a $10 billion foreclosure-prevention fund that would help them sell a home that is beyond their means or modify their loan. (Speech at NASDAQ, Sept. 17, 2007, and speech at Cooper Union, N. Y., March 27)

The 13 teams that competed in the tournament included American Street employees, their friends and their families, plus others who joined by word-of-mouth.

The tournament’s participants and more than 50 other business sponsors donated gifts for the auction or money for the event — ranging from $25 to $300, Shamoon says.

Further, he says professional athletes from the Chicago Bulls, the Chicago Bears and the Chicago Cubs donated autographs for the auction.

Loan disclosures

Why After participating in other sports-based charity events, American Street decided to host its own to benefit the housing industry, Shamoon says.

The company chose LUCHA because of the association’s role in helping Chicago-area homeowners who are facing foreclosure and who are in “desperate need,” he says.

[A mortgage document] should be one sheet of paper — and big letters at the bottom that say, “I understand this document.” (“Good Morning America,” April 1)

I believe we should finally enact the meaningful mort-gage-disclosure laws that the mortgage industry has been lobbying against for far too long. (Speech at NASDAQ, Sept. 17, 2007)

Ratings agencies

Financial institutions need to fully disclose their losses …
only then can regulators and rating agencies really do
their jobs. (“Statement By John McCain On
America’s Credit Crunch,” March 11)

There should be an immediate investigation of the relationship and business practices of rating agencies and their clients. (Speech at NASDAQ, Sept. 17, 2007)

Impact Together, Shamoon says, the basketball tournament and silent auction raised $3,000 for LUCHA.

Gabriela Roman, LUCHA’s director of marketing and fundraising, says her group will use the funds to help the increasing number of families dealing with foreclosure.