Durbin: Obama Failed to Contain Bank Foreclosure Properties

by Donald Hanz on Foreclosure Help

Dick Durbin, Senate Majority Whip and a close ally of President Barack Obama in the Senate, has criticized the administration of failure to contain Bank Foreclosure Properties that keeps on flooding the country and depressing the housing market.

Durbin said that he is skeptical about the voluntary loan modification approach and whether the program can help the country recover from the foreclosure crisis and the subsequent housing market collapse. The senator supported a bill which would have allowed judges to alter troubled mortgage loans.

During a financial services and general government subcommittee hearing of the Senate Appropriations, Durbin told U.S. Treasury Secretary Timothy Geithner that the Bush Administration and the Obama Administration have both failed to provide a solution that could significantly help contain the number of Bank Foreclosure Property.

He pointed out economic forecasts that about 8 million repossessed homes will flood the market in the coming years, on top of the almost 2 million distressed properties in the previous year.

Durbin supported a bill, endorsed by Obama, which would have allowed mortgage modifications. However, the bill never took off when both Democrats and Republicans opposed it and banks rejected it arguing that the legislation would reward homeowners who purchased homes that they could not afford.

Meanwhile, Geithner said that it would be some time before he would know whether the Obama Administration’s Make Home Affordable program aimed at helping distressed homeowners avoid Bank Foreclosure Properties would be a success.

But he told members of the Senate subcommittee that he believed that the program has the best incentive package that could help troubled homeowners and the best way to recover investments that can be used to address the housing market crisis.

The program is targeting to help as much as 9 million borrowers reduce their monthly loan payments to affordable terms. It is one of the major components of the Obama Administration’s efforts to stabilize and strengthen the languishing housing market.

he program includes a provision that would allow as many as 5 million homeowners who have good credit history and who have loans guaranteed by Freddie Mac and Fannie Mae to refinance their mortgages into affordable terms to avoid Bank Foreclosure Properties.

Geithner said that homeowners should expect more challenges ahead, with many more still on the brink of losing their properties to foreclosures.