Washington, D.C. — Today, Michael Ettlinger, Vice President of Economic Policy at the Center for American Progress, issued the following statement regarding the creation of a new Residential Mortgage-Backed Securities Working Group, and improvements to a government program that helps struggling homeowners avoid foreclosure:
For too long, American homeowners have been forced to bear the brunt of the housing downturn. Today’s announcement is an important first step to making sure those responsible for the crisis share that burden. Through better coordination and information sharing between federal and state agencies, this working group will have the resources and jurisdiction to investigate any wrongdoing, hold the right people accountable, and compensate households hurt by their misconduct. Importantly, reports indicate that any charges that emerge from the investigation and settlement negotiations between mortgage servicers and state attorney generals will not necessarily release banks from other liabilities, such as the robo-signing scandal.
The administration should also be applauded for their proposed changes to the Home Affordable Modification Program, or HAMP, which will help more underwater homeowners stay in their homes. By expanding the program to more borrowers and strengthening incentives for servicers and investors to write down mortgage principal, unnecessary foreclosures will be avoided. While details have yet to be released, if successfully implemented, these changes could make a meaningful dent in a foreclosure crisis that has slogged economic growth for nearly half a decade.
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