Merkley Seeks Improvements to Mortgage Modification Program

Merkley Seeks Improvements to Mortgage Modification Program

WASHINGTON, DC – As top Obama Administration officials prepare for a meeting with the nation’s mortgage servicing companies, Oregon’s Senator Jeff Merkley today urged the Administration to take a number of steps to make it easier for homeowners at risk of foreclosure to modify the terms of their mortgages.

“With eleven million Americans owing more on their mortgage than their homes are worth and sky-high unemployment, we face a continued tsunami of foreclosures unless we take immediate action,” said Merkley.  “These foreclosures are bad for families, for communities and for our economy as a whole.  We must be as aggressive in countering the problems facing Main Street as we have been addressing the problems of Wall Street.”

The Obama Administration unveiled its Making Home Affordable Program a few months ago.  This program was designed to be a resource families could rely on if they faced foreclosure, but slow implementation and a lack of responsiveness from loan servicers has stymied the effort to reduce foreclosure rates. 

Merkley held a number of meetings in Oregon, including a “Mortgage and Foreclosure Solutions Summit,” to better understand the foreclosure crisis and how current efforts to address it are faring.  In these forums, town hall meetings, and other venues, Merkley has heard from a number of Oregonians that it is still difficult to even reach loan servicers to begin the mortgage modification process, let alone actually renegotiate new terms.

Tomorrow, Treasury Secretary Timothy Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan will be meeting with a number of loan servicers.  In advance of that meeting, Merkley, a member of the Banking, Housing and Urban Development Committee, wrote to both men encouraging them to explore a number of options that will make it easier for families to connect with their servicer and come to new agreements.  Among his suggestions:

  •   Loan servicers should more readily share information with homeowners and HUD-certified counselors;
  •   Loan servicers should commit to acting more quickly on requests for modifications;
  •   Loan servicers should halt the foreclosure process once an application for modification has been received; and
  •   Loan servicers should make public their criteria for loan modifications and provide written explanations any time a modification is denied.

“Given the extraordinary economic conditions we face and the extraordinary support our government has provided to our financial system, our banks and loan servicers have an obligation to do everything in their power to ensure that this important government program works effectively and fairly,” wrote Merkley.  “While I will continue to look at new and innovative ways to keep working families out of foreclosure, I believe the solutions I offer today will go a long way towards improving the present programs.”