Senators Jim DeMint (R-SC), Bob Corker (R-TN) and Tom Coburn (R-OK) today introduced legislation that would “end the Housing Affordable Modification Program (HAMP),” according to a joint press release.
The program was intended to help over 7 million homeowners modify their mortgages to avoid foreclosure. Instead, HAMP has only permanently modified just over half a million loans while leaving thousands Americans worse off. A record 2.9 million homes were foreclosed on in 2010 with a projected 20% increase expected in 2011. In contrast, the Financial Services Roundtable reports that the private sector has completed nearly 9.8 million mortgage modifications since 2007, and over 1.2 million in 2010 alone.
Special Inspector General for the Troubled Asset Relief Program Neil Barofsky harshly criticized HAMP in Congressional testimony on March 2 stating that the program’s “failed trial modifications often leave borrowers with more principal outstanding on their loans, less home equity, depleted savings, and worse credit scores.” SIG Barofsky went on to say there is “near universal agreement that the program has failed to meet its goals” and concluded “there is little reason to hope things will get better.”
A bipartisan group “of 18 senators called on top Obama administration officials this week to improve federal foreclosure programs, a different track than House Republicans who proposed pulling the plug on foreclosure efforts entirely Thursday,” POLITICO reports.
The senators, led by Jeff Merkley (D-Ore.) and Olympia Snowe (R-Maine), the only Republican to sign on, urged swift streamlining of federal loan modification programs to a wide-ranging list of Obama top brass, including Treasury Secretary Timothy Geithner, Secretary of the Department of Housing and Urban Development Shaun Donovan, and Federal Reserve Chairman Ben Bernanke.
“We write you today to urge you to establish clear national regulatory standards for the loan servicing industry that eliminate confusion and barriers to mortgage modification and help keep families in their homes,” the senators wrote Thursday. “We believe those standards should include establishing a single point of contact, ending the dual track of pursuing foreclosure during the loan modification process, and ensuring an independent third-party review prior to sending a homeowner to foreclosure.”
Who else signed the letter:
Co-signing the letter was: Daniel Akaka (D-HI), Mark Begich (D-AK), Jeff Bingaman (D-NM), Richard Blumenthal (D-CT), Dick Durbin (D-IL), Al Franken (D-MN), Frank Lautenberg (D-NJ), Patrick Leahy (D-VT), Carl Levin (D-MI), Robert Menendez (D-NJ), Jack Reed (D-RI), Chuck Schumer (D-NY), Jeanne Shaheen (D-NH), Tom Udall (D-NM), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).
Filed under Housing, Letters
The Obama administration’s pick “to run the agency that oversees Fannie Mae and Freddie Mac doesn’t want to be renominated after his candidacy ran into strong Republican opposition, a White House official said Thursday,” the Wall Street Journal reports.
President Barack Obama in November nominated North Carolina’s top banking regulator, Joseph Smith, to lead the Federal Housing Finance Agency. But Mr. Smith ran afoul of several Republicans, who voiced concerns about whether Mr. Smith would exert enough independence from the Obama administration.
Mr. Smith faced resistance from Sen. Richard Shelby (R., Ala.), who suggested he would be “a tool of the administration.” Mr. Shelby and other Republicans feared Mr. Smith would heighten pressure on Fannie and Freddie to slash mortgage balances for troubled homeowners.
Mr. Smith, whose term as North Carolina’s banking commissioner expires on March 31, would have replaced Edward DeMarco, a career civil servant who has been serving as the housing agency’s acting director since August 2009.
His nomination had been “supported by both North Carolina senators, Republican Richard Burr and Democrat Kay Hagan.”
The administration is now “left without its own appointee at FHFA just as officials prepare a proposal for reforms to the system of providing U.S. mortgages.”
President Barack Obama “will again nominate economist Peter Diamond to the Federal Reserve Board next year, a White House official said on Thursday, setting up a potential clash with Republicans who will have more influence in the new Senate,” Reuters reports.
The Senate scuttled Diamond’s nomination on Wednesday by failing to vote on it before adjourning a lame-duck legislative session for the year.
The Obama administration views Diamond, a Nobel prize-winning economist at the Massachusetts Institute of Technology, as extremely well qualified for the job and believes Republicans will see this too if they stick with him.
Senator Richard Shelby (R-AL), who “will be back when the Senate reconvenes on January 5, had placed a so-called hold against confirmation of Diamond.”
Shelby applied the same tactic to delay confirmation of Obama’s choice to head the regulatory body that oversees Fannie Mae and Freddie Mac, Joseph Smith, the North Carolina commissioner of banks. Smith’s nomination also was killed by Senate inaction.
The only way Obama’s Democrats in the Senate could have gotten around the holds was to muster 60 votes in the 100-member Senate, but they were unable to do so.
White House officials “provided no details on whether they will try to revive Smith’s nomination to head the Federal Housing Finance Agency.”
Senator Shelby is currently the Ranking Member of the Banking, Housing and Urban Affairs Committee.
The Senate Banking, Housing and Urban Affairs Committee “voted Tuesday to recommend Joseph A. Smith Jr. as the next director of the beleaguered housing finance agencies Fannie Mae and Freddie Mac,” McClatchy reports.
The two mortgage giants have received an infusion of $151 billion from the federal government to keep them afloat, and President Barack Obama must tell Congress his plan for reorganizing the agencies next month. Smith would be in charge of carrying that out.
Smith now serves as the North Carolina commissioner for banks. Obama nominated him last month to take over the Federal Housing Finance Agency, which includes Fannie and Freddie along with the 12 federal home loan banks.
The Senate banking committee voted 16-6 to recommend Smith. Republican Sens. Richard Shelby of Alabama, Jim Bunning of Kentucky, Mike Crapo of Idaho, Jim DeMint of South Carolina, David Vitter of Louisiana and Mike Johanns of Nebraska voted against him.