Senators urge dropping barriers to refinance

Both of California’s U.S. Senators are among more than a dozen from both sides of the aisle who urged the Obama Administration today to make administrative reforms to help millions of responsible homeowners refinance and take advantage of today’s record-low interest rates.

The lawmakers – writing to Housing and Urban Development Secretary Shaun Donovan, Treasury Secretary Timothy Geithner, National Economic Council Director Gene Sperling and Federal Housing Finance Agency Acting Director Edward DeMarco – said that with interest rates at 3.94 percent, it’s time to lower barriers that keep borrowers trapped in higher-interest loans and to address other hurdles that limit existing refinancing programs.

Specifically, they called for removing loan-to-value limits, which they said would provide the most at-risk borrowers an alternative to simply walking away from their mortgage; eliminating loan level price adjustments, which they say make a refinance less affordable, reduce the benefit to the borrower, and can’t be justified on loans on which Fannie Mae and Freddie Mac already bear the risk; and ensuring that second lien holders don’t stand in the way of a refinance.

“Time is of the essence and we urge you to act quickly and aggressively to ensure that responsible homeowners receive the full benefit of these lower rates,” they wrote.

In addition to U.S. Senators Barbara Boxer, D-Calif., and Dianne Feinstein, D-Calif., the letter was signed by Johnny Isakson, R-Ga.; Robert Menendez, D-N.J.; Mark Begich, D-Alaska; Jeff Merkley, D-Ore.; Sheldon Whitehouse, D-R.I; Debbie Stabenow, D-Mich.; Scott Brown, R-Mass.; Robert Casey Jr., D-Pa.; Richard Burr, R-N.C.; Frank Lautenberg, D-N.J.; John Kerry, D-Mass.; Mark Warner, D-Va.; Saxby Chambliss, R-Ga.; and Ron Wyden, D-Ore.

Read the full text of the letter, after the jump…
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Bay Area gets grants to aid homeless veterans

More than $3.4 million in federal Housing and Urban Development and VA grants are going to several Bay Area public housing authorities to supply permanent housing and case management for homeless veterans, VA Secretary Eric Shinseki announced today.

Veterans taking part in the Housing and Urban Development’s Veterans Affairs Supportive Housing program (HUD-VASH) program rent privately owned housing and generally contribute no more than 30 percent of their income toward rent. VA offers eligible homeless veterans clinical and supportive services – including physical and mental health, substance abuse recovery and other aid – through its medical centers in San Francisco, Martinez, Palo Alto, Sacramento and Fresno.

The Oakland Housing Authority will get 50 vouchers for $498,696; the San Francisco Housing Authority will get 25 housing vouchers for $349,218; the San Mateo County Housing Authority will get 50 vouchers for $668,580; the Santa Clara County Housing Authority will get 100 vouchers for $1,159,500; the Pittsburg Housing Authority will get 25 vouchers for $238,881; the Santa Cruz County Housing Authority will get 25 vouchers for $280,395; and the Santa Rosa Housing Authority will get 25 vouchers for $206,565. Other grants totaling almost $656,000 went to Fresno, Monterey, Sacramento and Humboldt County.

“This initiative will strengthen our ongoing efforts to eliminate veteran homelessness by 2015 and improve quality of life for veterans,” Shinseki said in a news release. “Working with our partners at HUD and in Congress, we continue to make good progress to reduce Veteran homelessness, though much work remains. VA is committed to providing Veterans and their families with access to affordable housing and medical services that will help them get back on their feet.”


AG Harris launches mortgage fraud strike force

California Attorney General Kamala Harris today announced she’s creating a Mortgage Fraud Strike Force staffed by state Department of Justice attorneys and investigators charged with the duty of “protecting innocent homeowners and bringing to justice those who defraud them,” according to her news release.

Kamala Harris“Californians in search of the American dream all too often found a protracted personal and legal nightmare. Families are losing their homes, while those who perpetrated crimes and frauds against them walk free,” Harris said. “We will work to safeguard the homeowner at every step of the process – from origination of a loan to its securitization, and we will prosecute to the fullest extent of the law those who take advantage of trusting California families. We are setting a high bar for other states and we insist that homeowners be protected, respected, and informed.”

Harris rolled out the new initiative in Los Angeles this afternoon, accompanied by LA Mayor Antonio Villaraigosa and representatives from the U.S. Department of Housing and Urban Development and the Center for Responsible Lending.

Harris’ news release says the strike force will work out of state Justice Department offices in San Francisco, Fresno, Los Angeles and Sacramento, with 25 attorneys and investigators broken into three teams. A consumer enforcement team will target scams in the consumer arena, including predatory lending, unfair business practices in originating loans, deceptive marketing, and loan modification and foreclosure consultant scams. A criminal enforcement team will prosecute criminal frauds associated with the epidemic of mortgage scams, including fraudulent investment and money laundering schemes related to mortgage lending or foreclosure relief. And corporate fraud team will target misconduct involving investments and securities tied to subprime mortgages, as well as false or fraudulent claims made to the state with respect to these securities.

There were foreclosure filings against 546,669 California homes in 2010; an estimated 2 million California homes will enter the foreclosure process from 2009 through 2012. The state Justice Department reports it has received thousands of complaints related to foreclosure scams, mortgage fraud, and mortgage servicing practices in the past year.

“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the Center for Responsible Lending’s California office. “The Attorney General’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it. Given the economic damage wreaked by foreclosures in California, this initiative is very welcome news.”

Homeowners who believe they’ve been scammed can file complaints through the Attorney General’s website.


Foreclosure forum set for Saturday in Oakland

At least three state lawmakers are expected to attend a “foreclosure and economic crisis solutions forum” Saturday at which foreclosure victims, clergy, public employees and others will call for new initiatives to aid struggling communities.

Assemblyman Sandre Swanson, D-Alameda; Assemblywoman Nancy Skinner, D-Berkeley; and state Sen. Mark Leno, D-San Francisco, are scheduled to attend the public forum, from 10:30 a.m. to noon Saturday in St. Louis Bertrand Church, 1410 100th Ave. in Oakland. The event is being organized by the Alliance of Californians for Community Empowerment, Oakland Community Organizations, PICO California, and SEIU Local 1021.

The forum will feature testimonies from foreclosure victims and local officials who are still feeling the crisis’ impact, and will offer policy solutions.

“Banks must be held accountable,” Lilian Cabrera, currently in foreclosure proceedings, said in a news release. “I’m a small business owner in Oakland, and if I don’t hold up my end of a contract, I’ll lose my license. Well, the banks certainly haven’t held up their end of the deal and they’re getting away with it.”


House votes to axe federal refinance program

Despite railing from Democrats including a few from the East Bay, the House today voted to scrap the Federal Housing Administration Refinance Program, which aims to help homeowners who are “underwater” – owing more on their mortgage than their home is worth – refinance. The vote was 256-171.

Authorized under the Troubled Asset Relief Program (TARP), the FHA program has used only $50 million of the more than $8 billion set aside for it, and Republicans think the money should be redirected to pay down the federal budget deficit. Democrats agreed the program has underperformed but said it should be fixed rather than abolished, as there’s still enormous need for it.

The bill now goes to the Democrat-dominated U.S. Senate, which probably won’t even take it up, and the White House earlier this week threatened a veto.

Here’s what Rep. Jerry McNerney, D-Pleasanton, said today on the House floor:

“I’m proud to represent much of San Joaquin County, which is the jewel of California’s Central Valley. Our Valley is a great place to live and work, but unfortunately we’ve been hit very hard by the economic downturn. The Valley has been ground zero for the foreclosure crisis.

“Over the past few years, thousands of families in San Joaquin County and throughout the Valley have lost their homes. I’ve hosted foreclosure assistance workshops; I’ve met with hardworking people who were misled by lenders who are struggling to stay on top of their mortgages. I’ve seen grown men cry because they couldn’t keep a roof over their children, I’ve talked to veterans who served their country only to return home to notices of default, and I’ve met seniors on the brink of homelessness.

“The administration’s foreclosure prevention initiatives have fallen short in the Valley. Simply put, the administration’s programs haven’t effectively served the people underwater on their mortgage, and the administration hasn’t been tough enough on the big banks. I call on President Obama and his cabinet to develop more effective efforts to stem the tide of foreclosures.

“But despite these shortcomings, the bill the House Republicans are offering today is absolutely the wrong approach. It’s throwing the baby out with the bathwater. Instead of canceling foreclosure relief programs at their beginning stages like they’re proposing, we should be strengthening them so they’re more effective. Mortgage counselors from my district advise and plead to improve our efforts, to get tough on big banks and provide meaningful relief to families. Stabilizing the housing market is critical to economic recovery and creating jobs.

“For those reasons, I oppose H.R. 830, and I yield back the balance of my time.”

See Rep. John Garamendi’s statement – in four parts – after the jump…
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Miller leads complaint about foreclosure aid

Rep. George Miller, the House Education and the Workforce Committee’s ranking Democrat, led 18 House Democrats in complaining to the Obama Administration yesterday that not enough has been done to help distressed homeowners in the Bay Area and nationwide.

“We are writing to urge stronger and immediate actions by the Administration to help many of our constituents who are being routinely abused, lied to, and subjected to financial conflicts of interest by lenders and mortgage servicers, including those participating in federal programs,” they said in their letter to Vice President Joe Biden.

“Our constituents are running out of time. This Administration must stand up for America’s families caught in the housing crisis. The Making Home Affordable Program is simply not making sufficient progress to prevent unnecessary foreclosures. It has so far failed to ensure that mortgage servicers work with homeowners in good faith to achieve loss mitigation that works for homeowners, investors and our communities.”

With the $29 billion Home Affordable Modification Program having been pegged by the Government Accountability Office and other independent watchdogs as inefficient and in need of reform, House Republicans are targeting HAMP for elimination as part of their proposed budget cuts. Miller, D-Martinez, and his cohorts don’t support that, but rather are urging the program’s immediate improvement to crack down on mortgage servicers’ abusive practices.

Miller organized a meeting last week for more than a dozen of his colleagues with Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan to convey their concern over HAMP and their constituents’ mistreatment. Among the signatories of yesterday’s letter were representatives John Garamendi, D-Walnut Grove; Jerry McNerney, D-Pleasanton; Jackie Speier, D-Hillsborough; Anna Eshoo, D-Palo Alto; and Zoe Lofgren, D-San Jose.