FHA Reform Act of 2010

BREAK IN TRANSCRIPT

Ms. CLARKE. Mr. Chairman, I thank my colleagues, Chair Waters and Chairman Frank, for bringing this important bill to the floor today and for supporting my amendment, which is cosponsored by Representative Cuellar from Texas.

Before I speak about my amendment, I want to quickly recognize the significance of H.R. 5072. This bill will make essential reforms to strengthen the financial footing of the FHA, and it will enhance its authority to go after fraudulent lenders who have preyed on the most vulnerable of borrowers for far too long.

Mr. Chairman, many people have blamed this foreclosure crisis on the borrowers while some individuals, desperate to achieve the American Dream, may have sought to cut corners in the process. Fraudulent and unscrupulous lenders ultimately held the purse strings. These lenders bear a great deal of the burden for the foreclosure crisis, which continues to impact Americans and to devastate communities from coast to coast.

Last year, New York City saw a record 20,000 foreclosure filings. According to data compiled by the Furman Center for Real Estate and Urban Policy at New York University, in the first quarter of 2010, there were 4,226 foreclosures across New York City, up 16.3 percent from 2008. Brooklyn alone experienced 1,546 foreclosures in the first quarter of 2010.

Since the beginning of the FHA, Commissioner Stevens' tenure in 2009, the Commissioner and Deputy Assistant Secretary Bott have taken several steps to assess and to strengthen FHA's foreclosure mitigation capabilities, beginning with a thorough review of FHA and of private lender loss mitigation and foreclosure preventative activities. The FHA trained almost 2,000 staff lenders on how to better serve FHA borrowers to avoid foreclosure, to identify lenders which are underperforming and to share best practices to improve foreclosure mitigation performance.

FHA assisted more than 450,000 borrowers in the past year to avoid foreclosure through a variety of loss mitigation programs, but my constituents are telling me that more can be done to support the foreclosure counseling efforts. We must determine if enough resources are being devoted to foreclosure mitigation, especially for low-income borrowers. That is why I proposed this amendment, along with Mr. Cuellar, which would direct GAO to analyze the effectiveness of HUD's loss mitigation home retention efforts in helping distressed borrowers, especially low-income borrowers, hold on to their American Dream. While the FHA is working to strengthen its mitigation capabilities, resources for these efforts are likely insufficient for the massive size of the program.

I'd like to thank Representative Cuellar for joining me in this effort. Low-income borrowers in rural areas such as Mr. Cuellar's district in Texas are facing the same challenges as those in distressed urban areas such as parts of my district in Brooklyn.

I encourage my colleagues to support this amendment to assist our Nation to overcome our foreclosure crisis.

BREAK IN TRANSCRIPT

Source