Politics & Government

Thompson: Relief Needed for 'Mortgage Nightmare'

North Bay Congressman Mike Thompson joins group asking for housing market assistance for California residents.

U.S. Rep. Mike Thompson, who represents Healdsburg in Congress, this week joined 32 members of the California Democratic Congressional Delegation to petition President Obama for action on the country’s troubled housing market.

"More than 2 million homeowners in California owe more on their homes then their homes are worth, which equals 30 percent of all California homes with mortgages," Thompson said in regard to a letter the California congressional delegation sent to Obama and the Federal Housing Finance Agency.

“Our economy will continue to suffer and taxpayer confidence will never return if we do not help hard working families navigate through this mortgage nightmare,”  Thompson said this week.

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“Nothing the FHFA or the Administration has done is working and Californians are the ones who are suffering. Families are living paycheck to paycheck, struggling to keep roofs over their heads. Doing nothing is not an option," he added.

"We are calling on the White House and the FHFA to step up and take immediate action to help our communities and hard working middle-class families who just want to keep their homes,” he said.

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Specifically, the letter calls on President Obama to:

  • Urge the Federal Housing Finance Agency to establish a plan to refinance all mortgages owned or guaranteed by Fannie Mae and Freddie Mac.
  • Push for a major principal reduction plan for underwater homeowners, such as modifications in coordination with Chapter 13 bankruptcy filings.
  • Institute a “Homeowner’s Bill Of Rights” that would apply to Home Affordable Modification Program (HAMP), the Federal Housing Finance Agency FHFA, The U.S. Department of Housing and Urban Development (HUD), The US Department of Veterans Affairs (VA) and private servicer modification programs and include the following:

o   Make the process homeowner-friendly: Ensure a single point of contact; require servicers to review documents within a timely fashion and disclose information; and ban “advanced fees.”

o   Eliminate needless obstacles to effective modifications: Allow for flexibility in the debt to income ratio; end the requirement that homeowners be delinquent in order to be eligible for a loan modification; end dual tracking; and require that servicers not report adverse credit information while trial or permanent modification is underway;

o   Ensure accountability and establish an appeals process: Create an Office of Consumer Advocate; conduct random audits of modifications; and establish an independent appeals process for homeowners who believe their modification has been improperly rejected or handled in violation of program rules.


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