Lawmakers urge banks to allow aid for jobless

Five Northern California members of Congress are pressuring mortgage servicers to work with a new federally funded program in California intended to help unemployed homeowners pay their mortgages and avoid foreclosure.

The Keep Your Home California Unemployment Mortgage Assistance Program provides qualified unemployed homeowners up to $3,000 a month for up to six months to help pay their mortgage. But according to the office of Rep. George Miller, D-Martinez, if the monthly mortgage exceeds $3,000, the servicers won’t accept any payment at all, even if the homeowner could send a second check to cover the difference between what is owed and what the program covers. As a result, unemployed homeowners who could avoid foreclosure proceedings thanks to this program are instead at risk of failing to pay their mortgage and landing in foreclosure.

“If this program is to have meaningful success, mortgage servicers are going to have to get on board with processing these payments,” Miller said in a news release. “Refusing to accept dual payments is unacceptable and is a disservice to the homeowners who are doing everything they can to stay in their homes while they look for work. Homeowners shouldn’t have to forfeit their homes because of bureaucratic intransigence by banks and servicers.”

Rep. Zoe Lofgren, D-San Jose, another of the letter’s signers, said “it’s time that banks and servicers become part of the solution and not the problem.

“It’s ridiculous that servicers and banks are unwilling to participate in a program that will help protect the value of the very asset on which their loan is based on,” she said. “I find it deeply troubling that servicers would have borrowers default rather than simply accepting payment.”

In their letter – also signed by Rep. John Garamendi, D-Walnut Grove; Rep. Jackie Speier, D-Hillsborough; and Rep. Sam Farr, D-Santa Cruz – they wrote that, “we believe refusing to accept supplementary payments from homeowners is inexcusable and we strongly urge you to remedy this problem expeditiously… It is unacceptable that servicers in California are unwilling or unable to figure out a workable resolution to this problem, particularly given that two viable options to address the issue exist.”

Those options, they say, are either to accept two checks (one from the program and one from the homeowner) or to forebear the amount of the mortgage that exceeds the $3,000 program payment.


Reich: Jobless numbers call for stimulus now

“January’s job numbers confirm our worst fears: The economy is falling off a cliff and we’re in a vicious downward cycle,” University of California, Berkeley professor and former U.S. Secretary of Labor Robert Reich told reporters on a conference call a short while ago.

“People are not buying because they don’t have enough money in their wallets and paychecks … and that means businesses are laying off large numbers of Americans at a rate we haven’t seen in many, many decades.”

The U.S. Bureau of Labor Statistics announced today that 598,000 jobs were lost in January, pushing the unemployment rate to 7.6 percent. About 3.6 million jobs have been lost since the recession began in December 2007.

Heather Boushey, a senior economist with the Center for American Progress Action Fund – which as I’ve reported seems to be the pre-eminent progressive think tank of the Obama Administration, funded in large part by East Bay millionaires Herb and Marion Sandler, and the sponsor of today’s conference call – said America hasn’t seen job losses like this since the end of World War II. There are now 11.6 million adults out of work, “a heartbreaking, staggeringly large number,” she said; those who do still have jobs are working less, posting the lowest weekly hours since the Labor Department started tabulating such figures in 1964.

More on this from Reich and others, after the jump…
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Pete Stark on recovery package health provisions

Here’s Rep. Pete Stark, D-Fremont, chairman of the Ways and Means Health Subcommittee, at a Capitol news conference after yesterday’s markup of the economic stimulus package, speaking about funding for health information technology as well as extensions and subsidies for health coverage for the unemployed: