The tough economic conditions hurting Alabama families now has a name: the Great Recession. Experts tell us that today's economy, at one time just days from another depression, will be the new standard by how all other recessions are judged. It is, indeed, something that we have never seen before.
As you know, Alabama unemployment has more than doubled in the last year, and now exceeds 10 percent of our workforce. And high unemployment is leading to the next stage of home foreclosures in Alabama and throughout the nation. The first round of home foreclosures came about by those who bit off more than they could chew, taking loans that they simply could not afford to pay back.
Now the second round is beginning. Rising unemployment is cutting family income, and that means Alabamians are falling behind in their mortgage payments, payments they could easily make while employed. This is the real tragedy hitting Alabama families: those people who play by the rules, pay their taxes, obey the law, in fact, do everything that we as a society ask and expect them to do, yet, find themselves the new victims of the Great Recession.
A new poll by Auburn University's Center for Governmental Services found that 47 percent of Alabamians say they are worse off this year compared to last year, and 19 percent of homeowners say they are worried about making their mortgage payments in the next six months.
Alabama saw a surge in foreclosures in June, says a new study by Realty Trac. Foreclosure filings jumped a staggering 251 percent in June from the prior year and 38 percent from May. That's one foreclosure filing for every 787 households.
These people need help, and they deserve our help. When Wall Street, big banks and large insurance companies run into financial trouble, they get massive financial bailouts from government. But when real folks on Main Street get into financial trouble, what do they get?
That's why in the next regular session of the Alabama Legislature we need to take care of unfinished business. Alabama has some of the weakest mortgage foreclosure protection laws in the nation because of the powerful lobbying force of big banks. I believe state banks should be treated fairly, but that same courtesy should be given to Alabama consumers and homeowners as well. This is not about making Alabama banks uncompetitive; this is about giving our families the same rights and protections that families in every other state enjoy. Why do you deserve less than consumers in other states?
We must find new ways to help homeowners keep their homes and pay their mortgages, and the simplest approach always works best: give homeowners a little more time to catch up on their house payments before their homes are seized.
I support the Alabama Homeowner Protection Act. This bill increases the time before a lender can foreclose on a home. Under current Alabama law, no notice to the homeowner is required by the mortgage holder when foreclosure begins; a mortgage holder can simply foreclose on a property after three weeks of publication in the local newspaper. No notice is wrong and is unfair.
The Alabama Homeowner Act gives every homeowner notice -- 60 days plus four weeks of publication in the local newspaper. Together, this legislation will give homeowners 90 days before they can lose their homes to foreclosure. This 90 days is time for many to make other arrangements, and time for many of our families to find other work to save their homes. This protection is fair to homeowners, and it is fair to lenders.
You may not be facing financial problems of your own, but you do need to be concerned and involved with this issue. Why? This is hurting you, too. Alabama does not need more foreclosed homes on the market, homes that drive down the sale price of every other home for sale, devastate families, and hurt the values of every existing home in our communities. That is the most important thing you need to know: foreclosed homes hurt the value of YOUR HOME, the value of YOUR community, and the economic vitality of YOUR county. This is your problem, too.
Hard-working Alabama families need to be treated fairly as we face the toughest economic challenges in our lifetime. The Alabama Homeowner Protection Act does just that. Call all of your state representatives and demand action before the value of YOUR home is impacted even more. Tell your representatives to stand up TO the big financial interests in Montgomery and stand up FOR every homeowner in Alabama.