Congress to President: Give Homeowners $50B in Principal Reductions
Nineteen Democratic Congressmen are urging the president and their fellow representatives to propose a measure in 2013 that would provide $50 billion worth of principal reductions to struggling homeowners across the country.
Our Miami foreclosure lawyers know that this is significant not because it is the only time the president has been urged to take action to help underwater homeowners who continue to be affected by the housing crisis, but because if adopted, it would represent one of the most significant relief programs.
Even the heralded deal struck by attorneys general in 49 states and the country’s five largest banks only came to $26 billion. Plus, much of that involved reductions in interest payments and reimbursements for those who had already been wrongly forced from their homes.
A measure like this – to reduce minimum monthly payments for homeowners – could potentially be the starting point of real progress on this front. It would be a boon to both state and local economies that have been reeling since 2008.
The letter comes amid concerns about a lack of action on the impending fall-out of the so-called “fiscal cliff” that will present even greater financial challenges to American homeowners in the form of skyrocketing taxes.
The House members urge fellow leaders to consider implementing provisions in fiscal cliff legislation that will address the ongoing woes of underwater homeowners – to the tune of $50 billion. These would be for loans guaranteed by Freddie Mac and Fannie Mae.
The members note that the Board of Governors of the Federal Reserve have reported that the drop in home prices since 2008 has destroyed an estimated $7 trillion in household wealth in America. The market is continuing a slow recovery, but even as Reserve Chairman Ben Bernake has noted, the revival of the housing market continues to face substantial obstacles. He had gone on to say that the degree to which that challenge was met will help determine the sustainability and strength of our overall economic recovery.
The biggest hurdle to this is the huge number of homeowners who still owe more on their mortgages than their properties are actually worth. CoreLogic reported in September that an estimated 11 million homes in the U.S. were still underwater as of the second quarter of this year. That amounts to about 22 percent of all mortgaged residential properties.
Earlier this summer, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, released study results indicating that if the government were to offer principal reduction modifications under the Making Homes Affordable-Principal Reduction Alternative Program to those borrowers could help as many as half a million homeowners. Additionally, it would save Fannie and Freddie an estimated $3.6 billion and save taxpayers up to $1 billion.
The House members wrapped up their appeal by adding that there are clear benefits to providing assistance to underwater borrowers, particularly in the form of saving taxpayers a great deal of money. With that in mind, the House members urged the president and other leaders to further expand the program.
If you would like to urge the President to consider this measure, you can contact the White House via e-mail, or you can write a letter addressed to:
The White House 1600 Pennsylvania Avenue NW Washington, D.C. 20500
We urge you to consider doing this, as well as contacting your local House and Senate representatives. Let them know that this measure is important, and that their support of this very much matters.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call 305-358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.