Truth13 on Vito Fossella and Mortgage Crisis

REP. VITO FOSSELLA'S ANSWER TO MORTGAGE CIRSIS IS TO RAID HOMEOWNERS RETIREMENT ACCOUNTS

STATEN ISLAND, NY ­­ According to Reuters [1], Republican Rep. Vito Fossella (NY­13) the Congressman representing Staten Island and Brooklyn, is introducing the Homeowners Assistant Act. Rep. Fossella’s bill will allow homeowners with a poor credit history, affected by the subprime crisis to tap into their retirement accounts to bail themselves out of trouble.

Richard Marini of Truth13, a group of concerned citizens residing in the 13th district, said "Vito Fossella obviously does not understand the severity of the issue. His answer to the mortgage foreclosure crisis is to shift the focus away from the irresponsible lending practices of his industry campaign contributors, and raid struggling homeowners’ retirement funds."

According to The Staten Island Advance [2], AARP spokesman Jim Dau warns "homeowners at risk should understand that tapping in early into retirement savings compounds into a bigger loss."

A New York State Senate report on subprime lending stated Staten Island's South Shore had the highest rate of foreclosures [3]. The report which covered the five boroughs as well as Nassau and Westchester counties showed that the 10314 zip code had the greatest number of foreclosure filings. The second largest area was Eltingville and Annadale. A U.S. Senate committee reported [4] that 1,472 homes would be in foreclosure on Staten Island. Over one million homeowners nationwide will be forced into foreclosure over the next 6 years at a cost estimated at $120 billion dollars [5] but industry experts say the cost would be significantly more then that.

“An important aspect of this is that not only will these people lose their homes, but any loss to the lenders will come out of our pockets too. The lenders will not suffer their own bad risk taking. The cost will be passed on in the form of a government bailouts to protect corporate interests, which in turn, will be passed on to the public in the form of taxes” said George Rosquist, a member of Truth13.

On November 15, 2007, Vito Fossella protected his lending industry campaign contributors by voting against a bill (H.R. 3915, 11/25/2007). The bill would have required the disclosure of an estimated interest rate (APR), the maximum it can adjust, the total estimated monthly payment and what percentage it is of a borrower's monthly income. This bill would have reformed consumer mortgage
practices and provided accountability, with licensing and registration requirements for residential mortgage originators and minimum standards for consumer mortgage loans.

Steve Schwall of Truth13, said “If Fossella really wants to help the problem, why not lobby for an investigation into the business practices of the mortgage businesses and brokers who made so much money on these loans, fully knowing that most of them would default? Fines for fraud violations could be applied to a fund for the victims. I don't expect to see that from Vito, since he receives much of his campaign money from banks and financial industry services and probably would not want to hurt his friends.”

According to the Center for Responsive Politics, Federal Election Committee records show that since 1989, Rep. Fossella has received more than $1.7 million dollars in contributions from the Real Estate, Finance and Insurance sector [6]. On December 13th, 2007 Ameriquest, a member of the National Associated of Home Builders which has contributed over $17,000 to Rep. Fossella [7] since 1990, mailed checks to 25,000 of eligible homeowners in New York State [8] alone as part of a settlement agreement [9] that resolved an investigation by the Attorney Generals and banking/finance regulators implicating Ameriquest and other affiliated companies that had engaged in various unlawful mortgage lending practices from January 1, 1999 through December 31, 2005. Attorney General Andrew M. Cuomo said “Ameriquest both exploited borrowers and contributed to today's staggering crisis in the mortgage industry” [10].

About Truth13: Founded in 2007, Truth 13 is a group residents of New York's 13th Congressional district in Staten Island and Brooklyn who are concerned about how their Congressman is failing to represent his constituents. Their mission is to educate voters of the District to Fossella’s voting record and his dependence on campaign financing from the banking and other industries.

1. http://www.reuters.com/article/fundsFundsNews/idUSN1042665720071210
2. http://www.silive.com/news/advance/index.ssf?/base/news/119729166355850xml&coll=1&thispage=1
3. http://www.silive.com/news/advance/index.ssf?/base/news/1188726334318800.xml&coll=1&thispage=1
4. http://www.nydailynews.com/news/2007/10/26/2007­10­26_schumer_warns_of_15000_home_foreclosures.html
5. http://money.cnn.com/2007/04/13/real_estate/subprimebailout_cost.moneymag/index.htm
6. http://www.opensecrets.org/politicians/allsector.asp?CID=N00000983
7. http://www.opensecrets.org/orgs/recips.asp?ID=D000000086&Type=P&Cycle=A&Sort=A&State=NY
8. http://www.oag.state.ny.us/press/2007/jul/jul12b_07.html
9. http://www.ameriquestmultistatesettlement.com
10. http://www.oag.state.ny.us/press/2007/dec/dec24a_07.html

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