Faith Schwartz, executive director of the HOPE NOW Alliance, testified before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity on foreclosure prevention efforts and issues related to the recovery of the housing market. Schwartz testified as part of a hearing entitled “Are There Government Barriers to the Housing Recovery?” Also testifying with Schwartz were Douglas Holtz-Eakin, president, American Action Forum and former director of the Congressional Budget Office; Michael A. J. Farrell, chairman, president and chief executive officer, Annaly Capital Management Inc.; and Julia Gordon, senior policy counsel, Center for Responsible Lending.
In her testimony, Schwartz outlined the unprecedented efforts of the industry in completing 1.76 million permanent loan modifications for homeowners in 2010. This total includes more than half a million modifications done through the Obama Administration’s Home Affordable Modification Program (HAMP). She also summarized several of the government’s foreclosure initiatives related to HAMP, HAFA, Hardest Hit Funds and other programs aimed at reducing foreclosures across the nation.
As part of her testimony, Schwartz explained that the many initiatives, public and private, have also helped contribute to an increase in foreclosure timelines. Time added to the foreclosure process results from factors that include: Multiple programs and rules, complex processes, and the need to have multiple contacts over a longer period of time with at-risk homeowners. She pointed out that extending foreclosure timeliness adds to investor uncertainty and reluctance for investors to return to the private markets. Ms. Schwartz further stated that, going forward; investors will need more clarity, certainty and understanding of the roles for all participants.
Here are some excerpts from Schwartz’s statement to the Subcommittee:
“Public and private intervention to foreclosure has contributed to record numbers of borrowers seeking help to avoid foreclosure and has assisted millions of borrowers in finding ways to remain in their homes. These efforts have also contributed to longer timelines and higher costs associated with the foreclosure process. I hope that the information shared today will assist you as you think about the important issue of bringing private capital back to the market.
“Appropriately, some of the government programs have been used to increase consumer protection by providing more options to avoid foreclosures. That said, efforts should be made to ensure strong coordination and program alignment. Simplicity, where possible, should replace complex procedures and processes for homeowners and servicers with clear protections in place to preserve consumer protection for homeowners.”
For more information, visit www.hopenow.com.