Wednesday, September 2, 2009

Washington, D.C. – Congresswoman Dina Titus of Nevada’s Third District sent the following letter to Treasury Secretary Timothy Geithner today requesting he examine the Making Home Affordable (MHA) program.  After receiving feedback through her Foreclosure Fighter web page from constituents who are trying to receive help through MHA, Titus is concerned that mortgage servicers are unresponsive and failing to help homeowners until they get behind on their payments, making them ineligible for certain aspects of the program and damaging their credit.

Below is the text of the letter:

September 2, 2009

The Honorable Timothy Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Geithner,

Two weeks ago, I posted a form on my Congressional website for homeowners in the Third District to share their experiences with me regarding their attempts to receive assistance through the Administration’s Making Home Affordable program. In just a short period of time, I have received more than 200 submissions from my constituents detailing their attempts to participate in the program.

As Secretary Donovan recently stated, “Las Vegas is ground zero of the foreclosure crisis,” and we need swift action to bring an end to this problem. While the Department of the Treasury will be releasing monthly reports on the performance of servicers who are participating in the program, I want to take this opportunity to inform you of the experiences that individuals are having as they try to receive assistance as part of the program. My district is one of the worst in the country and helping families stay in their homes has been a top priority of mine since being elected to Congress.

Almost every submission on my website details frustration due to lack of communication between the homeowners and their servicer. Many of my constituents have attempted to contact their servicers multiple times. I have been told stories of individuals who have called their servicer 20 or 30 times and spoken with a different person each time, but were unable to get any closer to receiving the changes they need in their loans to avoid foreclosure. They have been put on hold for hours, placed into a voicemail message system, left detailed messages, and did not have their calls returned. Many families in the Third District, due to no fault of their own, are facing serious financial hardship, but would like to continue making payments on their homes and avoid foreclosure. Despite their good faith efforts to contact their servicers, many are not getting any response.

This lack of communication is simply unacceptable. Many of the lenders that own the loans for my constituents’ homes were also the recipients of some of the largest taxpayer assistance payments last year.  Despite their insistence that the American taxpayer help them, they are not making a good faith effort to help struggling families across the United States. As noted in your recent report, only 9% of eligible homeowners have received assistance as part of the Making Home Affordable Program. While some Americans who are eligible will not apply, those who took the time to share their story with me have applied, but are not receiving any helpful response from their servicers. I hope that you will address this problem in your future conversations with these banks.

It is my belief that this program will be most successful in keeping families in their homes if it helps those who are able to remain current on their payments in the short term. Many of my constituents who are current on their payments report that they have been told by their servicers that they do not qualify for the program, or cannot be helped until they are behind on their payments. As you know, in order to qualify for the refinance portion of the program, one must be current on payments.

As a result, some homeowners have elected to stop making their mortgage payments, damaging their credit significantly, in hopes of receiving attention from their servicers and eventual assistance.  I respectfully request that you discuss this issue with the servicers that are participating in the MHA program to determine if this is an industry-wide practice or rather a few isolated incidents. If this is a wide-ranging issue, I respectfully request that you work with the servicers to end this practice.

I am also concerned that encouraging those homeowners who can currently make their payments to stop doing so, just to garner the attention of lenders, is not appropriate. The servicers participating in this program should be helping families who qualify for help, not encouraging families to purposely fall behind on their payments.

Thank you for your attention to this matter and I look forward to your timely response.

Sincerely,

Dina Titus
Member of Congress

Cc: The Honorable Shaun Donovan

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Tags: housing