On July 16, 2009, the Senate Banking Committee held a hearing titled: Preserving Homeownership: Progress Needed to Prevent Foreclosures. The main purpose of the hearing was to discuss the current home ownership programs, including Hope for Homeowners (H4H) and the Making Home Affordable program and their lack of progress in stemming the rise of foreclosures.
The first panel was Herbert M. Allison, Jr., the Assistant Secretary for Financial Stability at the Treasury Department and William Apgar, a Senior Advisor to the Secretary for Mortgage Finance at HUD.
During their testimony and Q&A, both men blamed the servicers for providing incorrect information or failing to respond to customers in a timely fashion. Many Senators criticized the Administration officials for not implementing programs quickly enough and sought assurance that more tangible results would arrive soon.
The second panel included a consumer who discussed his experience in trying to modify his mortgage, representatives from Bank of America and Wells Fargo, consumer advocates, an economist and a representative from the mortgage investor industry.
In response to criticism that not enough is being done to keep borrowers in their homes, the banks and servicers blamed the government for not providing sufficient guidance. The consumer advocates blamed the banks and servicers for not providing sufficient training and resources to meet its customers’ demands. The economist from the Federal Reserve of Boston and the mortgage investors endorsed principal reduction for borrowers to establish homeowner positive equity despite the loss investors would incur.
The attached summary lays out the highlights of the hearing, including a brief summary of the witness' opening remarks and the question and answer periods.