Secretary of Housing and Urban Development Steve Preston said the centerpiece of the federal government's effort to help struggling homeowners has been a failure and he's blaming Congress.
The three-year program was supposed to help 400,000 borrowers avoid foreclosure. But it has attracted only 312 applications since its October launch because it is too expensive and onerous for lenders and borrowers alike, Preston said in an interview.
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Rep. Barney Frank (D-Mass.), who helped steer the HUD program through Congress, said some of the federal bailout money should be used to revamp it. Frank acknowledged the initiative has its problems, but he blamed them on the Bush administration.
"That's partly their fault," said Frank, chairman of the House Financial Services Committee. "The administration was critical of the program and kept putting pressure on us to make it cheaper and more restrictive. . . . If it hadn't been for the Bush administration's opposition, we would have written it in a better way in the first place."
Of course our boy Steve was all positive when the bill was passed.
This program starts today and ends September 30, 2011. The HOPE for Homeowners program was passed by Congress and signed by the President at the end of July. The legislation allows FHA to kick off the program no earlier than October 1.
We wanted the program implemented by October 1. We moved quickly. Many said it couldn't be done. We knew it would be tough.
* We needed extensive coordination with other federal agencies.
* Our teams needed to reprogram and expand systems and hire staff.
Well, we did it.
I thank everyone involved for their hard work and dedication. I especially want to thank all of the HOPE for Homeowners Board designees including Brian Montgomery, the FHA Commissioner; Phil Swagel, Treasury's Assistant Secretary for Economic Policy; Governor Betsy Duke from the Federal Reserve Board; and the Director of FDIC, Tom Curry, for their public service to the nation during these trying times.
This program is one more tool in the toolbox for homeowners and lenders. It is yet one more way that families may be helped to weather the current turbulence in the housing market. For the past two years, HUD has offered other ways to help homeowners find the right mortgage and stay in their homes. FHASecure is what we call our refinancing program.