HUD Secretary Donovan Visits Fresno, Touts Refinancing Progress
The nation's top housing official visited Fresno today to generate support for the Obama administration's efforts to stem the foreclosure crisis.
Shaun Donovan, Secretary for the U.S. Department of Housing and Urban Development met with homeowners and members of the media today, saying that preventing foreclosures is key to stabilizing property values and boosting the economy.
"Even if you're doing everything right, paying your bills every day, when that sign goes up, that foreclosure sign next door, your own home loses $5,000 to $10,000 in value that very day," said Donovan.
The secretary's visit to the Central Valley included an appearance on Valley Public Radio's Valley Edition.
Donovan told host Juanita Stevenson that changes to the administration's Home Affordable Refinance Program (HARP) have resulted in more people being able to stay in their homes.
"We saw just in June alone, [a] more than 10 times increase in the number of deeply underwater homeowners who were able to refinance," said Donovan.
Despite the changes, only about 1 million people have been able to take advantage of the program, far less than the 4-5 million that the administration originally projected.
Donovan said that for homeowners who aren't eligible for HARP, the administration and Senate Democrats are backing three new bills which would extend mortgage relief to the rest of the estimated 11 million homeowners who owe more on their homes than they are worth.
"We've also proposed legislation that's in front of Congress right now, we're hoping the Senate will vote right when they come back from break in September, and that would allow all homeowners that are current on their mortgages, whether they have a government insured mortgage or not, to be able to refinance to today's low interest rates," said Donovan.
A bill by California Democrat Senator Dianne Feinstein would allow homeowners with private loans to refinance through government backed mortgages. Another bill by Oregon Democrat Senator Jeff Merkley would create a new government backed trust to help underwater homeowners switch to lower interest loans. A third bill by California's Barbara Boxer would allow more of those with mortgages backed by Fannie Mae and Freddie Mac to take advantage of the HARP program.
But with November's election just months away, some Washington observers have questioned the likelihood that any of the proposed reforms could win passage in both the House and the Senate before the end of the year.