Washington, D.C. – Oregon’s Senator Jeff Merkley penned a letter to President Obama today urging a greater focus on helping families stay in their homes and avoid foreclosure. In the letter, Merkley stressed that a strong housing market is essential to future job creation and noted that next week’s State of the Union address would be an ideal moment to jump start the conversation about how we can decrease foreclosures, stabilize the housing market, and help spur economic recovery.
“It is a tragedy to see families forced from their homes, but fixing the housing crisis is about more than preventing foreclosures,” Merkley wrote. “It is about providing stability for working families, creating jobs, and making our economy work for middle class families once again. Next week, Mr. President, you will have the attention of the nation. I urge you to use this opportunity to renew efforts to tackle the national foreclosure crisis.”
Merkley also noted the shortcomings of the Administration’s Home Affordable Modification Program (HAMP) program in securing mortgage modifications for families facing foreclosure and called for a renewed focus on repairing the battered housing market. Over 300,000 foreclosures have been filed against American families each month for the past 20 months. In the past year, nearly 28,000 Oregon families have been served with foreclosure filings.
As the depressed housing market continues to hinder the nation’s economic recovery, Senator Merkley is proposing a six point plan to boost the housing market and stem the tide of foreclosures. Merkley’s plan would do the following:
- Bolster the market by providing a permanent tax credit to assist first-time homebuyers in making a down payment;
- Assist families facing foreclosure through a national “short refinance” program that would enable some such homeowners to refinance their mortgages based on current interest rates and home values;
- Stop the “dual track” by which banks continue moving towards foreclosure while they consider homeowners’ applications for loan modifications;
- Require loan servicers to provide homeowners with a single point of access when they seek a loan modification, which will improve accountability and ensure greater clarity during the process;
- Guarantee homeowners an independent, third-party review prior to foreclosure to ensure that laws were properly followed and homeowners were treated fairly; and
- Implement the “lifeline” bankruptcy option by providing bankruptcy judges with the power to modify the terms of home loans just as they can with vacation homes and yachts.
Read more about Merkley’s proposal on the web: http://www.merkley.senate.gov/imo/media/doc/Paving the Way to a Healthy Housing Market1.pdf
Read the full text of Senator Merkley’s letter to President Obama below.
Dear President Obama:
I am writing to ask you to renew efforts to respond to the national foreclosure crisis in your State of the Union address.
Addressing the foreclosure crisis is essential to our families and our economy. Nearly three years have passed since the housing bubble burst, the unemployment rate skyrocketed, and our economy began its sharp decline. While some sectors of the economy are beginning to show signs of recovery, the nation’s housing market continues to struggle. Indeed, foreclosure filings continue at a pace of over 300,000 per month, devastating families across our nation.
Your Administration has made efforts to combat the foreclosure crisis through the Home Affordable Modification Program (HAMP), adding components over time to respond to new areas of concern in the housing market. Overall, however, the results are falling far short of the goals set and the resources promised. The goal of HAMP was to prevent three to four million foreclosures, but to date fewer than 600,000 homeowners have been approved for permanent loan modifications. Experts now estimate that only one-quarter of the $50 billion pledged for the HAMP program will be expended.
A record one million families lost their home to foreclosure last year. Each of these foreclosures has damaged a family, set back a community, and chipped away at an already weak national economy. Few would argue that the housing crisis was the root cause of the collapse in our financial markets and the resulting economic recession. Although we have begun the process of reforming our financial system and restoring access to credit to small businesses, as long as families continue to lose their homes by the hundreds of thousands, even the most inspired economic policies will likely fall short.
Here are six specific proposals you could include in your State of the Union speech:
- Assist families facing foreclosure through a national short refinance program
- Establish a third-party review prior to foreclosure and fully enforce existing law
- Stop the “dual track” that continues foreclosures while loan modifications are evaluated
- Provide homeowners with a single point of access when they seek a loan modification
- Implement the lifeline bankruptcy option
- Bolster the market with a permanent tax credit for first-time homebuyers
I have elaborated on these concepts in the attached plan.
It is a tragedy to see families forced from their homes, but fixing the housing crisis is about more than preventing foreclosures. It is about providing stability for working families, creating jobs, and making our economy work for middle class families once again.
Next week, Mr. President, you will have the attention of the nation. I urge you to use this opportunity to renew efforts to tackle the national foreclosure crisis. If you make the restoration of the housing market and the economic growth it supports a top priority for your Administration and Congress, I believe you will touch the hearts and minds of millions of Americans who are worried not only about keeping their homes but also about building their futures.
I stand ready to assist you in any way I can.
Jeffrey A. Merkley
United States Senator