Conyers Calls on Congress to Pass Obama Housing Assistance Plan that Includes Principal Reduction for Underwater Homeowners
Washington, DC, February 1, 2012
Today, House Judiciary Committee Ranking Member John Conyers, Jr. (D-Mich.) released the following statement applauding the Obama Administration’s plan to help make it easier for underwater homeowners to refinance their mortgages to take advantage of historically low interest rates. The Obama Administration estimates that the plan could help nearly 11 million underwater Americans save approximately $3,000 a year on their housing payments. U.S. homeowners owe approximately $700 billion in underwater debt as a result of the financial crisis of 2008.
“The plan the Obama Administration sent to Congress today will help bolster the housing market and provide much needed relief to homeowners who owe more on their mortgages than the value of their homes,” said Conyers. “Congress should put the well-being of the American people above political posturing and pass this deficit neutral, common sense plan immediately.
“I also call on my colleagues in the House and Senate to take the opportunity to build on the President’s plan by including legislation in this package that requires some form of principal reduction for underwater homeowners. Economists, housing policy advocates, and analysts at the Federal Reserve all agree that reducing the amount of underwater principal owed by homeowners is the most effective way to prevent foreclosures and stabilize our communities.
“A good place to start would be for Congress to require government-backed lenders Fannie Mae and Freddie Mac to write down the principal of the mortgages they own. As I have argued for many years, such an action would provide immediate assistance to homeowners, provide a positive jolt to the economy, and lower taxpayers’ liability by helping keep homeowners current on their mortgage payments.
“Fannie and Freddie’s regulator, the Federal Housing Financing Agency (FHFA), has the power to implement a principal reduction program. However, up until now its director has failed to implement such a program. If FHFA refuses to act to stem the tide of foreclosures destroying communities in Southeast Michigan and across the country, Congress must provide the leadership that FHFA has failed to exercise.”
For additional information regarding President Obama’s proposal go to: https://www.whitehouse.gov/the-press-office/2012/02/01/fact-sheet-president-obama-s-plan-help-responsible-homeowners-and-heal-h