Congresswoman Waters Reiterates Call for Suspension of Foreclosures, Proposes Loss Mitigation Legislation
In a national TV interview today, Congresswoman Maxine Waters (D-CA), who chairs the Subcommittee on Housing and Community Opportunity, reiterated her call for a suspension of foreclosures in all 50 states and also discussed legislation she has proposed to help solve the nationwide foreclosure problem.
During the interview on CNBC's "Squawk on the Street" program, Congresswoman Waters said that a foreclosure moratorium, along with an investigation into reported fraud at the hands of the major mortgage servicers, is necessary to "hit the pause button" and stop unwarranted foreclosures and other systemic problems in the mortgage servicing industry.
While strongly supporting a nationwide moratorium, Congresswoman Waters emphasized this is a necessary step but not enough to solve the foreclosure problem.
Congresswoman Waters pointed to additional steps that should be taken, including mandatory loan modifications, to keep homeowners in their homes, and ensure that foreclosure remains a last resort only after these steps have been explored.
She has introduced the Foreclosure Prevention and Sound Mortgage Servicing Act (H.R. 3451) which prohibits the initiation of foreclosure proceedings without offering the homeowner loss mitigation. Loss mitigation includes a variety of options: mortgage modification, a repayment plan, waiver of interest or fees, forbearance, short refinancing, short sale, deed-in-lieu of foreclosure, or cancellation or postponement of a foreclosure sale to allow the borrower additional time to sell the property.
The Congresswoman steadfastly defended her assertion that millions of Americans could have avoided foreclosure if loss mitigation were required. She also noted that many families have wrongly lost their homes because some servicers engaged in fraud and collusion by processing foreclosures without properly reviewing each homeowner's case.
During and after the interview, the Congresswoman's office received dozens and dozens of calls from Americans all over the country who expressed appreciation that someone was standing up for them. Many shared stories of their own experiences being tricked by bankers and brokers pushing exotic financial products and offering low-interest loans, only to watch their mortgages reset, their interest rates skyrocket, and their banks and servicers give them the runaround.
Congresswoman Waters announced that the Housing and Community Opportunity Subcommittee will hold a hearing on the foreclosure crisis as soon as the House reconvenes in November.