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United States Congressman Elijah E. Cummings
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March 25, 2010 Paul Kincaid, 202-225-4289
Cummings Demands Effective Foreclosure Prevention
Congressman takes part in hearing, regarding foreclosure mitigation and prevention.
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The hearing, entitled ““Foreclosure Prevention: Is the Home Affordable Modification Program Preserving Homeownership?” was held in order to investigate the effectiveness of the HAMP program, which was designed to rescue homeowners who face foreclosure.
“This hearing is a critical component in our role of ensuring that government operations function with the highest level of effectiveness and efficiency,” said Cummings. “We must set aside our preconceived notions about these policies, good or bad, and conduct an honest evaluation of whether this program is accomplishing as much is absolutely required to get our constituents through this storm.”
The committee questioned Neil Barofsky, Special Inspector General for the Troubled Assets Relief Program; Gene Dodaro, GAO Acting Comptroller General; John Taylor, President and CEO, National Community Reinvestment Coalition and; Herbert. Allison, Jr., Assistant Treasury Secretary for Financial Stability.
Barofsky admitted that the program has been disappointing. Fewer than 200,000 households have received permanent modifications. Barofsky also said that the goal set for the department was essentially pointless, and that the program would not be a success until a more appropriate, reachable goal was created. He also said that many recommendations from the SIGTARP have been, by and large, ignored.
Cummings also heard testimony regarding both public and private developments that he hopes will help keep Americans in their homes. A new Treasury directive was announced recently, that will force banks to stop foreclosure while a homeowner is in modification negotiations. Also, a new policy by Bank of America will allow homeowners who are “underwater” (whose outstanding mortgage value exceeds the value of their home) to have parts of the principal of those mortgages forgiven.
“I am very pleased with the actions taken by both Treasury and by the private lender,” said Cummings. “Though I have still have questions about how effective they will be, I am very hopeful that this is a sea change in how the financial system deals with foreclosures. I heartily encourage both the Treasury and all private lenders to continue to pursue paths similar to that which we have recently seen. With that said, we must realize that every yard we advance on this problem is simply reclaiming lost ground. Too many Americans are losing their homes for us to claim victory. We must continue the fight until the incredible damage done to the housing market has been erased.”
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