Clinton Backs Paterson On Mortgage Crisis
Senator Hillary Rodham Clinton is backing efforts by Governor David Paterson to address New York's mortgage crisis and prevent more New Yorkers from losing their homes.
Last week, Senator Clinton and Senator Evan Bayh (D-IN) called on the Office of the Comptroller of the Currency (OCC), which has primary jurisdiction over national banks, to move to help states obtain needed data about subprime mortgages and the scope of the current foreclosure crisis. Governor Paterson has called on the Congressional delegation to help get the state greater access to the data it needs to analyze the extent of the crisis. In a letter to Comptroller of the Currency John C. Dugan, Senators Clinton and Bayh urged the OCC to push the subprime mortgage lenders that have failed to provide key mortgage data to the State Foreclosure Prevention Working Group to begin working with them.
"As the housing crisis deepens, it is critical that we have as much information as possible so that we can help American families facing possible foreclosure. Lenders that refuse to provide data to the State Working Group should act in the public's, their investors' and their own interests in working with the states to meet the current challenges. I urge the OCC to push these lenders to provide this crucial data so that we can effectively address the current mortgage crisis and keep families in their homes," said Senator Clinton.
"We have proposed legislation in New York that would assist homeowners most at risk of losing their homes as well addressing the problems that got us into this crisis to begin with," said David A. Paterson, Governor of New York. "However, states can not do it alone and that is why we fully support the efforts of Senator Clinton to get the federal government to act in a comprehensive way. It was a lack of action that helped get us here, and more inaction is inexcusable. Forecasts show that the worst is yet to come, so we must move now to save the tens of thousands of New Yorkers impacted by the crisis."
"States like New York are at the forefront of combating predatory lending practices and continue to press lenders and servicers to expand their loss mitigation efforts in order to avoid unnecessary foreclosures that are not in the interests of either the lender or the borrower," said Richard H. Neiman, Superintendent of Banks for New York. "The most recent statistics show that current industry efforts are not keeping pace with the rising rate of foreclosures."
According to the Governor's office, the most recent statistics, released last Tuesday by the New York State Banking Department and RealtyTrac, show that current industry efforts to avoid unnecessary foreclosures are not keeping pace with the rising rate of foreclosures. According to RealtyTrac, there were approximately 14,000 foreclosure filings registered in New York during the first three months of 2008, a 40 percent increase from the same period in 2007. There were approximately 11,600 foreclosure filings among the top 10 New York counties during the first three months of 2008, with Queens and Brooklyn accounting for 32 percent and Long Island accounting for 24 percent of state-wide filings. In Upstate New York, Monroe and Albany counties were among the hardest hit.
Further evidence of the crisis came with the second report published by the State Foreclosure Prevention Working Group, which also found that industry efforts to avoid unnecessary foreclosures are not keeping pace with the rising rate of homeowners in trouble. The report provides analysis of data from October 2007 through January 2008, and found that seven out of 10 seriously delinquent borrowers in the United States are still on track to lose their homes to bank foreclosure, despite widely-publicized campaigns to encourage homeowners in trouble to seek help and for servicers to fast-track loan modifications. (The full Report is available online at http://www.banking.- state.ny.us/pr080422.pdf).
Governor Paterson also agreed with Senator Clinton's call for and also urges the Federal Government to take action in addressing the mortgage crisis. Since the crisis began last year, Senator Clinton has urged regulators and the mortgage industry to take the necessary steps to end the foreclosure crisis and ensure that it never recurs. Last year she reintroduced the 21st Century Housing Act, which strengthens the Federal Housing Administration (FHA), makes FHA loans available to more Americans, and expands access to a responsible and stable alternative to the subprime market. She has also introduced the Home Ownership Preservation Act which eliminates abusive lending practices, cracks down on unscrupulous brokers, expands the foreclosure prevention initiatives at Fannie Mae and Freddie Mac, and provides financial assistance to states to expand their foreclosure prevention programs. Senator Clinton has also called on the mortgage industry and Wall Street to observe a 90-day moratorium on subprime foreclosures, a 5-year freeze in rates on subprime adjustable rate mortgages, and proposed $30 billion in assistance to states and communities to fight foreclosures and offset the costs associated with mounting vacancies.