Senator Wants President Obama To Talk Foreclosures in State of The Union

While President Obama is expected to focus largely on jobs and U.S. economic competitiveness in his State of the Union, a Democratic senator wants to hear the president talk about how to more strongly stem the tide of housing foreclosures across the country.

Sen. Jeff Merkley (D-Ore.) last week wrote Obama, urging him to do so. The freshman highlighted the well-reported troubles with Obama’s existing program to combat foreclosures, and proposes a six-point plan to keep Americans from losing their homes.

Obama will give his annual, nationally televised address from the chambers of Congress on Tuesday night.

Merkley notes that more than 300,000 foreclosures have been filed against American families each month for the past 20 months.

“It is a tragedy to see families forced from their homes, but fixing the housing crisis is about more than preventing foreclosures,” Merkley writes in his letter dated Jan. 20. “It is about providing stability for working families, creating jobs, and making our economy work for middle class families once again. Next week, Mr. President, you will have the attention of the nation. I urge you to use this opportunity to renew efforts to tackle the national foreclosure crisis.”

Obama’s own program has struggled since its creation in 2009, with participating banks modifying only a tiny percentage of troubled mortgages. The federal government has spent just a small percentage of the $50 billion the administration has pledged toward the loan-modification effort.

In a statement released by his Senate office, Merkley says his plan would do the following:

  • Bolster the market by providing a permanent tax credit to assist first-time homebuyers in making a down payment;
  • Assist families facing foreclosure through a national “short refinance” program that would enable some such homeowners to refinance their mortgages based on current interest rates and home values;
  • Stop the “dual track” by which banks continue moving towards foreclosure while they consider homeowners’ applications for loan modifications;
  • Require loan servicers to provide homeowners with a single point of access when they seek a loan modification, which will improve accountability and ensure greater clarity during the process;
  • Guarantee homeowners an independent, third-party review prior to foreclosure to ensure that laws were properly followed and homeowners were treated fairly; and
  • Implement the “lifeline” bankruptcy option by providing bankruptcy judges with the power to modify the terms of home loans just as they can with vacation homes and yachts.
  • The publisher of the news site On The Hill, Scott Nance has covered Congress and the federal government for more than a decade.

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