WASHINGTON (12/6/07)—Four members of the Senate Banking Committee pressed Treasury Secretary Henry Paulson to ensure that the terms of the department’s much-anticipated plan to address subprime mortgage problems help as many borrowers as possible. Paulson announced a press conference for today (see related story in Inside Washington
) conference to discuss the Bush administration's efforts to help struggling homeowners keep their homes. In anticipation of the Treasury’s announcement, the banking panel members wrote urging Paulson to negotiate rigorous terms, which would include the following five points:
* Eligibility for modification must not be too narrow, and people must be afforded every opportunity to ensure that they remain in their home; * Loan modifications must be long enough to ensure the long-term affordability of mortgages, not merely delay foreclosure; * All prepayment penalties must be waived; * The guidelines must guarantee the fair treatment of families who will not be able to avoid foreclosure, even with modification; and * The modification program must be transparent to allow for independent monitoring.
The letter was signed by Senate Banking Committee Chairman Christopher Dodd (D-Conn.), and four other Democrats, Sens. Bob Casey of Pennsylvania, Charles Schumer of New York, and Sherrod Brown of Ohio. “All of these matters are extremely important to the economic well being of millions of families and the country as a whole. These issues are also evolving very quickly and we understand you may be entering the final stages of negotiating the loan modification plan,” the lawmakers wrote. They noted to Paulson that there is not a consensus in the Senate that “strong legislative action is needed. “ “Majority Leader Reid’s efforts to pass the reform of the Federal Housing Administration prior to the Thanksgiving recess were frustrated by an objection from Senate Republicans. Just as you have adjusted your position over time and begun to see the need for actions we have been advocating for some time, we hope that you will join us in impressing upon our colleagues the dire need for action,” the letter urged.