U.S. Sen. Sherrod Brown (D-OH) has authored a letter to the executives of the nation's four largest banks calling on them to work with responsible homeowners to avoid foreclosure. "Your banks all recorded profits during the second quarter of this year, but many Ohio families are struggling just to keep their homes," Brown wrote in a letter to the heads of Bank of America, Citigroup, JP Morgan Chase and Wells Fargo. "My state had a record 89,053 foreclosures in 2009. Nearly one in six mortgage holders in Ohio are either in foreclosure or 30 days past due. Nearly one in three home sales is a troubled property, and these properties are selling for almost 40 percent less than their market value. These numbers are troubling. Equally alarming are the calls and letters that my office regularly receives from homeowners frustrated by their experiences when they attempt to solve their mortgage-related difficulties in a responsible manner. My office has received a disproportionate number of complaints from constituents about the ability or willingness of the largest banks and their third party mortgage servicers to work with homeowners to avoid foreclosure through both affordable mortgage modifications under the Home Affordable Modification Program (HAMP) and short sales under the Home Affordable Foreclosure Alternatives (HAFA) Program.
"It is in the best interest of your banks to work with responsible borrowers to help them stay in their homes or find other alternatives to foreclosure," Brown said in the letter. "Consequently, I ask you to consider the difficulties that Ohioans have described, above, and to take a hard look at your institutions' ability to communicate amongst their various operations, subsidiaries and affiliates, your responsiveness to homeowners' communications, and the degree to which any shortcomings in these areas are hindering the mortgage modification and short sale processes. For example, consider the effects that fee arrangements and other economic incentives have on the mortgage modification process as your third party mortgage servicing contracts come up for re-negotiation to ensure that these agreements are promoting, and not hindering, modifications. I urge you to take aggressive steps to relieve the burden on the honest, hard-working, middle-class Ohioans who want to save their homes and fulfill the American dream."
"We applaud Sen. Brown for working so hard on behalf of foreclosure-weary Ohioans. We're in our 15th year of record foreclosures," said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio. "We're trying hard to dig ourselves out of our economic malaise, and housing is one of the key elements to recovery. It's in the best interest of homeowners and banks to work together to bring us back to economic stability."
As a member of the Senate Committee on Banking, Sen. Brown is working to improve the federal loan modification program so that more Ohioans can lower their monthly mortgage payments and stay in their homes. In February, Brown wrote to U.S. Treasury Secretary Timothy Geithner to suggest improvements to the HAMP program so that more Ohio families avoid foreclosure. The HAMP program was designed to encourage banks to modify mortgages to prevent foreclosures. Ohio continues to rank 48th among the 50 states and the District of Columbia in the number of homeowners who have been able to modify their mortgages for lower payments through HAMP. Only 14.8 percent of seriously delinquent loans have been modified through HAMP in Ohio, and only eight percent of trial modifications have been converted into permanent modifications. Brown also urged more federal funding for foreclosure prevention counseling programs.
Sen. Brown is a leading proponent of providing assistance to communities affected by the housing crisis and population loss. He fought for the creation of the Neighborhood Stabilization Program in the Housing and Economic Recovery Act of 2008 and the continuation of the program in the American Recovery and Reinvestment Act (ARRA) of 2009.
In Sep. 2008, Brown announced that Ohio communities would receive more than $258 million in NSP funds authorized by the housing bill. In Sep. 2009, Brown wrote to Secretary Donovan in support of Ohio applicants to the second wave of funding through the NSP program. Brown has also proposed legislation to place reasonable caps on the size of our nation's behemoth financial institutions, in order to reduce concentration in the banking industry and end "too big to fail."
Click here to view the letter submitted by Sen. Brown.
For more information, visit http://brown.senate.gov.