Congresswoman Waters Chairs Hearing Examining “Making Home Affordable” Plan Obama Plan Discussed in Subcommittee on Housing and Community Opportunity
The House Financial Services Subcommittee on Housing and Community Opportunity chaired by Congresswoman Maxine Waters (D-CA), today held a hearing to examine the Obama Administration's plan to prevent foreclosures by helping homeowners modify and refinance troubled mortgages.
Congresswoman Waters said, "The ‘Making Home Affordable' plan is a great first step toward fixing the housing crisis. Today we heard from a diverse group of witnesses including Administration officials, economists, academics and consumer advocates representing various perspectives, and I believe we gained a better understanding of how this plan can help millions of American families remain in their homes."
A video of today's hearing as well as the written testimony of the witnesses can be found at https://www.house.gov/apps/list/hearing/financialsvcs_dem/hr031909.shtml
Congresswoman Waters' opening statement follows:
Today's hearing will examine the White House's plan to prevent foreclosures and keep families in their homes through the modification and refinancing of troubled mortgages. I have identified foreclosure prevention and loan modifications as a priority for Subcommittee oversight. In February, we held a hearing on mortgage servicers and challenges to providing more effective loan modifications for troubled mortgages. Today we will hear from government agencies and experts in the field to gain a better understanding and assessment of the President's plan and how it will assist troubled homeowners.
As we will hear today, a systematic loan modification program is necessary to streamline foreclosure mitigation efforts.
Since day one, I have been a supporter of enacting a systematic modification program. On the first day of the 111th Congress, I introduced legislation—H.R. 37, the Systematic Foreclosure Prevention and Mortgage Modification Act of 2009—to put such a plan in action. The President's plan builds upon my legislation.
In addition to learning about the President's foreclosure prevention plan, I hope that this hearing will also provide Members with an in-depth analysis of the types of loan modifications that have been effective in preventing foreclosures and re-defaults. I believe this information will assist us in understanding the role of the President's plan in fixing the housing crisis.
Loan modifications — changing the terms of the loan — are essential to ending the foreclosure crisis. According to Realty Trac, in 2008, 2.3 million households were in some stage of the foreclosure process, an 81 percent increase from 2007 and a 225 percent increase from 2006. The foreclosure crisis shows no signs of slowing down with Credit Suisse estimating that 8.1 million homes will enter foreclosure over the next four years.
The President has recognized the urgency of the foreclosure crisis with the release of the Making Home Affordable Program. I am interested to hear how the plan will provide fast and effective relief to troubled homeowners and begin the process of stabilizing the housing markets. The government witnesses today will discuss their collaboration to implement the President's plan.
We will also hear about the obstacles that are preventing borrowers from staying in their homes. According to a study by First American CoreLogic, there are a growing number of underwater loans – loans where the mortgaged property is worth less than the amount owed on the loan. As of December 31, 2008, more than 8.3 million U.S. mortgages, or 20 percent of all mortgaged properties, were underwater. Another 2.2 million are approaching this point. The witnesses today will shed light on the types of loan modifications that may work best for these types of troubled homeowners.
In closing, I would like to comment on the urgent need for foreclosure assistance, and I would like to commend the President and his Administration in their swift action to respond to this growing crisis. Millions of families are struggling with their mortgages and millions more are at risk of losing their homes. Saving the housing markets and keeping families in their homes will require serious effort from all key players. Congress, the Administration, banks, mortgage servicers, and borrowers must work together to implement a plan to stop the rising tide of foreclosures and keep millions of families in their homes.