WASHINGTON — U.S. Sen. Jeff Merkley, D-Ore., took administration officials to task on Thursday for the snail’s pace at which federal aid is reaching homeowners at risk of foreclosure.
While the foreclosure rate in Central Oregon and nationwide remains high, lenders have been slow to modify mortgages for borrowers on the verge of losing their homes. In letters to Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan and in the Senate Housing Committee on Thursday, Merkley urged the Obama administration to speed up the process.
Merkley cited a Government Accountability Office report released Thursday that found the Home Affordable Modification Program hadn’t spent any of the $50 billion pledged as part of the bank bailout bill. Although several hundred thousand homeowners have had payments lowered through mortgage modifications, their applications are too early in the process for the federal subsidies to have kicked in.
“I was trying to establish, and I think you’re agreeing with me, that, to date, now that we are eight months into the future from the January 15 letter assuring a sweeping program, we’ve yet to spend a dime that actually helped a homeowner yet,” Merkley said, while questioning Herbert Allison Jr., assistant secretary for Financial Stability at the Treasury Department.
In Deschutes County, 307 notices of default were filed in August, compared with 335 in July, an 8.4 percent drop. April was the county’s record month for default notices, with 346.
Through August, 2,377 notices of default have been filed in Deschutes County this year, compared with 1,125 through the same period last year, an increase of 111.3 percent.
The modification program pays lenders who agree to reduce monthly mortgage payments for homeowners at risk of defaulting on their loans.
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