Economy
4:53 pm
Wed May 9, 2012

Council Approves Housing Resolution

It was more of a celebration and less of a protest in the City-County Building today as homeowners gathered to recognize Pittsburgh City Council for being among the first in the country to call on the President to be more proactive with homeowner rights.

City Council members unanimously approved a resolution sponsored by councilman Bruce Kraus Tuesday urging President Obama to investigate banks associated with the mortgage crisis and to request a fair settlement review.

"What we're asking of President Obama is to prosecute banks and lending institutions aggressively [and] where appropriate to any fund that are then sequestered through those prosecutions go into providing real relief for people that are struggling with underwater mortgages," Kraus said.

An underwater mortgage is when the market value of the home drops below the amount that is still owned on a loan. It usually occurs after re-financing a home or as a result of sliding property values. Kraus calls the housing situation a "national tragedy."

"We're asking in addition for the passage of strong legislation and regulation to support principle write-downs of underwater mortgage," Kraus said. "To facilitate real negotiations between lenders and borrowers alike so that the interest rates on loans can be reduced and that agreeable, affordable payment plans can be set up."

The Council's resolution claims that more than 137,000 Pennsylvania homeowners have been affected by the housing crisis. Michele Kohar is one of them. Her home has been threatened with foreclosure for three years, but she does not know which creditor has the note to her home.

"All of a sudden these banks came up to me and said, 'You owe me money,'" Kohar said. "I'm like, 'I never met you, but okay.'"

Kohar, a former mortgage broker, said she paid in excess of $23,000 to different banks, none of which was put towards her mortgage. Kohar thanked Pittsburgh City Council for the resolution and request for legislation.

"People do want to pay," she said, "but we have to know who to pay, and these banks are not being held accountable."

Kohar's case is currently in bankruptcy court. The Will of Council will be sent to President Obama by the Pittsburgh City Clerk today.