Democrats losing patience with Obama over foreclosures

WASHINGTON — Unhappy California lawmakers on Wednesday escalated pressure on the Obama administration to aggressively aid the state's distressed homeowners.

In a show of political force and a reminder that the president has disenchanted some allies, House Democrats from throughout the state rallied publicly for stepped-up efforts that might fend off foreclosures.

"California has been ground zero from the beginning," Rep. Doris Matsui, D-Sacramento, said of the foreclosure crisis, "and it has been for too long."

Matsui and 31 other California House Democrats wrote President Barack Obama urging more help with mortgage refinancing, interest-rate reductions and an overall streamlining of assistance.

The proposals would apply nationwide, potentially giving them political traction in other high-foreclosure states such as Florida, Idaho and Georgia. Nationwide, lenders filed a record-high 3.8 million foreclosure notices in 2010, according to RealtyTrac, a company that markets and tracks foreclosures.

Although Obama has offered help — he included a sentence about the issue in his highly touted jobs speech last month — lawmakers complain about lack of follow-through. Pointedly, the Californians note they are still waiting for a meeting with Vice President Joseph Biden, six months after it was first requested.

"The problems we are facing are exacerbated by the fact that the administration has simply not gotten it right, over and over and over," said Rep. Dennis Cardoza, D-Merced.

The only two California Democrats not to sign the letter were House Minority Leader Nancy Pelosi, who as a matter of policy often steers clear of delegation letters, and Rep. Maxine Waters, D-Los Angeles.

Further dramatizing their frustrations, 15 of the California Democrats convened a Wednesday news conference to echo the request for help. For a solid half-hour Wednesday, the Californians took turns characterizing the administration efforts with words like "tepid," "defensive," "not focused," "failed consistently" and "total lack of urgency."

"Our economy will not improve until the housing sector gets better," said Democratic Rep. Zoe Lofgren, chairwoman of the state's Democratic delegation.

Administration officials have told the Californians they will come back later this month with further suggestions to help. More broadly, officials point to certain successes with existing programs.

"Because we provided responsible families opportunities to stay in their homes, more than 5.1 million modification arrangements have been started in the last two-and-a-half years," Secretary of Housing and Urban Development Shaun Donovan told the Mortgage Bankers Association on Tuesday. "That's more than double the number of families who've lost their homes during that time."

There also have been some signs of improvement. The number of notices of default filed with all California county recorder offices between April and June fell 19 percent compared to the second quarter of 2010, according to San Diego-based DataQuick.

Even so, RealtyTrac revealed that one in every 226 housing units in California had a foreclosure filing during August. This was twice the national average.

The Obama administration has previously tried several mortgage assistance programs. The Home Affordable Modification Program, begun in 2009, has helped cut interest payments or made other revisions to about 357,000 mortgages nationwide. The Home Affordable Refinance Program has helped about 838,000 homeowners refinance.

"We hope to have a (revised) plan readied in the next couple of week," HUD's Donovan told the Mortgage Bankers Association.

One proposal under discussion has been to expand the Home Affordable Refinance Program so that some borrowers could refinance into lower-rate loans even if they owe greater than 125 percent more than their home is worth.

On Wednesday, the California lawmakers further suggested refinancing all mortgages owned or guaranteed by Fannie Mae and Freddie Mac, and a reduction in interest rates for homeowners who file for Chapter 13 bankruptcy, among other proposals.


Department of Housing and Urban Development web site


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