Tierney demands action on foreclosures from Treasury and HUD Secretaries
Washington, DC – March 4, 2011 – (RealEstateRama) — As the nation’s foreclosure crisis continues, Congressman John Tierney (MA-06) yesterday joined a select group of his congressional colleagues at a meeting with Treasury Secretary Timothy Geithner and Secretary of Housing and Urban Development Shaun Donovan to demand answers for the Administration’s failure to assist homeowners facing foreclosure through the plagued federal Making Home Affordable Modification Program (HAMP). HAMP is supposed to provide financial incentives to participating mortgage servicers, investors, and borrowers to support sustainable loan modifications for borrowers having trouble paying their mortgages. The meeting coincided with the release of a Government Accountability Office (GAO) report which stated that despite the repeated recommendations of GAO, the TARP Special Inspector General, and Members of Congress, Treasury has failed to finalize consequences for servicer noncompliance with HAMP program requirements and to improve the transparency and accountability of the program.
“It is well past time for Secretary Geithner to side with millions of working families in need by requiring those Wall Street banks with the largest mortgage market shares to provide the relief they promised to homeowners, particularly the unemployed,” said Congressman John Tierney. “Simply put, HAMP has been an abysmal failure. Over the past several months, my office has heard from hundreds of area residents who have experienced difficulties negotiating mortgage modifications with lenders, and, in far too many cases, faced foreclosure. These families deserve a fair-shake from their mortgage lenders and servicers, many of whom are the very same large banks and investment houses whose reckless speculation caused the financial crisis in the first place. These families have turned to the federal government for assistance, only to find that the program Treasury put in place to help them has created widespread confusion, triggered predatory lending offers and has allowed lenders and servicers to time and again put their profits ahead of their binding commitments to homeowners – and to do so with impunity. This must change now. I will continue to work with my colleagues to ensure our families and communities get the critical relief they deserve. That starts with confronting the Secretaries and if necessary, will entail bringing the matter to the White House.”
Since its inception, the HAMP program has come under significant scrutiny by homeowners, Members of Congress, and housing and consumer advocates alike for the slow pace of modification approvals, paperwork processing issues, failed promises of modification, and difficulties receiving clear answers from servicers. Nationwide, the HAMP program was projected to assist 3-4 million homeowners at imminent risk of foreclosure by reducing their monthly mortgage payments to no more than 31% of their monthly income. To date, the program has helped just an estimated 600,000 Americans, and is helping roughly 30,000 per month receive permanent loan modifications. In the Sixth District, the city of Lynn has one of the highest incidences of foreclosure in Massachusetts, and other communities also are experiencing foreclosure crisis. The Wall Street “big four” institutions of Bank of America, Chase, Wells Fargo and CitiGroup are the principal banks involved.
