Over $1 billion awarded in Recovery Act
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced
an expansion of the Obama Administration's Home Affordable Refinance Program to
include participation by borrowers who are current but up to 125 percent underwater
on their mortgage. Under authorization provided by the Federal Housing Finance Agency,
borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie
Mac will now be allowed to refinance those loans according to the terms of the Home
Affordable Refinance program established earlier this year.
Secretary Donovan made the announcement while touring a neighborhood in Las Vegas
with Senate Majority Leader Harry Reid (D-NV) and Congresswoman Dina Titus. Las
Vegas leads the nation in foreclosures and approximately 67 percent of the current
mortgage holders have mortgages that are higher than the worth of their homes.
"I am here in Las Vegas because it is ground zero of the foreclosure crisis," Secretary
Donovan said. "I am pleased to join Senator Reid and Congresswoman Titus to make
this announcement today, which I believe will make a critical difference in our
ability to help many more Americans, particularly those here in Nevada, to stay
in their homes. The president's Making Home Affordable plan is already helping far
more families than any previous foreclosure initiative and with today's announcement
we will extend its reach still further."
"I am pleased Secretary Donovan accepted my invitation to come to Nevada and see
firsthand the challenges homeowners here are facing," Senator Reid said. "His announcement
that the loan-to-value requirement for the Administration's refinance program has
been raised to 125 percent is good news for Nevadans fighting to stay in their homes.
The neighborhood we visited today represents the hardships caused by the housing
crisis and the hope that is being restored through the neighborhood stabilization
program and the Home Affordable refinance program."
"I am pleased to welcome Secretary Donovan to Las Vegas and thank him for coming.
This is an opportunity to show him firsthand the magnitude of the foreclosure crisis
in Southern Nevada," Congresswoman Titus said. "His announcement that the Making
Home Affordable program will be expanded to help those further underwater, something
I have advocated for, is welcome news that will help thousands of Nevadans stay
in their home. I will continue working with Senator Reid, Secretary Donovan, and
the rest of the Administration to find more ways to help the hardest hit areas like
Southern Nevada, as every new foreclosure prolongs the housing crisis and hampers
our country's ability to move out of the current recession."
"This decision is part of our ongoing efforts to maximize the effectiveness of the
Making Home Affordable program and adapt to an ever-changing housing market," said
Treasury Secretary Tim Geithner. "By expanding refinance eligibility, we can bring
relief to more struggling homeowners more quickly. It's a crucial step in our broader
efforts to get America's housing market and economy on the path to recovery."
Currently, only those borrowers whose first mortgage does not exceed 105 percent
of the current market value of the property are eligible for the Obama Administration's
Home Affordable Refinance Program. For example if the property is worth $200,000,
the borrower must owe $210,000 or less. Today's announcement will allow more homeowners
to become eligible for the program, by increasing the eligibility to 125 percent.
Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market,
was first announced by the Administration on February 18. In just a few months,
more than 200,000 borrowers have received offers for trial loan modifications, tens
of thousands of refinances and trial modifications are under way, and informational
mailings about the program have been sent to more than one million borrowers who
may be eligible.
Donovan toured a neighborhood that has experienced several foreclosures in recent
years, negatively impacting the property values of surrounding homes. The neighborhood
has been targeted for Clark County's Neighborhood Stabilization Program, which will
use funds to purchase and rehab foreclosed homes, provide downpayment and closing
cost assistance to those purchasing foreclosed homes, and provide housing counseling
to potential buyers.
Donovan also announced his plans to deploy HUD Foreclosure Rapid Response Teams
to assess the areas hardest hit by foreclosure, starting in Las Vegas. The Las Vegas
team will consist of two senior-level HUD Field staff with experience in Single
Family Housing and in community outreach. Their task in the next two weeks will
be to determine the needs in Nevada and in surrounding areas based on delinquency
rate data at the zip code level, as well as listening sessions with local stakeholders
such as housing counseling agencies, lenders, and members of the public. Based on
the Foreclosure Rapid Response Team's assessment, HUD will commit two full-time
employees to implement their recommendations. Additionally, HUD plans to deploy
two Fair Housing equal opportunity specialists to the Las Vegas HUD office, which
will provide the opportunity to conduct outreach and education locally, receive
discrimination complaints and more readily conduct full investigations.
HUD receives about 100 complaints of housing discrimination every year from residents
of Nevada, well over double what was received as recently as 2005. With a local
presence, HUD's Fair Housing & Equal Opportunity office should make it easier for
Nevada residents to obtain justice and relief, to educate housing consumers about
predatory lending, and to conduct program compliance and monitoring in the over
3000 public housing units and over 8500 Section 8 vouchers.
Info From
www.HUD.gov