News
Sports
ENLARGE
The federal government should overhaul how lenders modify mortgages to end a foreclosure tsunami that has led to the filing of more than 300,000 foreclosures a month over the past two years, U.S. Sen. Jeff Merkley said in an interview with The News-Review.
While the Obama administration hoped to prevent 3 million to 4 million foreclosures nationwide through the Home Affordable Modification Program, fewer than 1 million homeowners have been approved thus far for permanent loan modifications, Merkley said Friday in Roseburg.
“Putting the housing market back on its feet is essential to putting our economy back on its feet,” Merkley said. “It's housing that brought us into this crisis, and it's going to be housing that plays a big role in taking us out.”
Merkley said he wants regulatory agencies to require banks to assign a single loan officer to each application for a loan modification. Typically, a homeowner speaks to a different person each time he calls a lender.
Having a single person to deal with would improve accountability and continuity, Merkley said.
Merkley said he also wants lenders to stop the practice of continuing to move to foreclose on a home while considering whether to modify the loan.
“We need to move with the same passion and the same effort that we had to save major financial institutions,” Merkley said. “We were quick to save the financial institutions, but we have been very slow to assist families.”
Without action, 5 million to 8 million additional foreclosures are expected to take place in the next few years, Merkley said.
“That is going to weigh down this economy and put a very dark cloud over this economy for a long time to come,” he said.
He said he wants a national program that would enable homeowners who are facing foreclosure to refinance their mortgages based on current interest rates and home values. Borrowers who are in default but who still have a steady income would be eligible. The program would provide 30-year, fixed-rate loans guaranteed by the Federal Housing Administration.
Lenders would receive a larger payoff than through foreclosure and communities would benefit by keeping vacant homes from dragging down property values and inviting crime, he said.
On other issues:
• Merkley decried a decision last week by the nation's largest bank to begin charging customers $5 a month to use their debit cards.
The move by Bank of America came as the Federal Reserve implemented new rules on Saturday capping the fees banks charge merchants for using debit cards at about 24 cents per transaction. Previously, merchants paid an average of 44 cents per transaction.
Bank of America stands to lose $2 billion annually from the change, but could earn up to $3 billion a year from the new fee.
“My reaction was that will be the last time I use my Bank of America debit card that I have in my wallet,” Merkley said.
• Merkley said he was pleased with a recent timber sale in the Medford area that came out of a pilot program in the Applegate Valley. Boise Cascade paid $231,000 to harvest trees on 250 acres for two years. Merkley said he hopes the work by forestry professors Norm Johnson of Oregon State University and Jerry Franklin of the University of Washington, which includes additional pilot projects in the Myrtle Creek drainage in Douglas County and in Coos County, will lead to more timber sales while improving habitat for the threatened northern spotted owl.
Merkley reiterated that he is committed to extending the federal timber safety net, which is expiring this year. He and fellow Oregon Sen. Ron Wyden have been working to continue payments to timber counties while coming up with a forest management plan that would increase logging, create jobs and generate more revenue for counties.
“This is a federal commitment to these counties that were promised money from timber sales in exchange for the loss of property taxes because more than half the land in Oregon is owned by the federal government,” he said.
While the Obama administration hoped to prevent 3 million to 4 million foreclosures nationwide through the Home Affordable Modification Program, fewer than 1 million homeowners have been approved thus far for permanent loan modifications, Merkley said Friday in Roseburg.
“Putting the housing market back on its feet is essential to putting our economy back on its feet,” Merkley said. “It's housing that brought us into this crisis, and it's going to be housing that plays a big role in taking us out.”
Merkley said he wants regulatory agencies to require banks to assign a single loan officer to each application for a loan modification. Typically, a homeowner speaks to a different person each time he calls a lender.
Having a single person to deal with would improve accountability and continuity, Merkley said.
Merkley said he also wants lenders to stop the practice of continuing to move to foreclose on a home while considering whether to modify the loan.
“We need to move with the same passion and the same effort that we had to save major financial institutions,” Merkley said. “We were quick to save the financial institutions, but we have been very slow to assist families.”
Without action, 5 million to 8 million additional foreclosures are expected to take place in the next few years, Merkley said.
“That is going to weigh down this economy and put a very dark cloud over this economy for a long time to come,” he said.
He said he wants a national program that would enable homeowners who are facing foreclosure to refinance their mortgages based on current interest rates and home values. Borrowers who are in default but who still have a steady income would be eligible. The program would provide 30-year, fixed-rate loans guaranteed by the Federal Housing Administration.
Lenders would receive a larger payoff than through foreclosure and communities would benefit by keeping vacant homes from dragging down property values and inviting crime, he said.
On other issues:
• Merkley decried a decision last week by the nation's largest bank to begin charging customers $5 a month to use their debit cards.
The move by Bank of America came as the Federal Reserve implemented new rules on Saturday capping the fees banks charge merchants for using debit cards at about 24 cents per transaction. Previously, merchants paid an average of 44 cents per transaction.
Bank of America stands to lose $2 billion annually from the change, but could earn up to $3 billion a year from the new fee.
“My reaction was that will be the last time I use my Bank of America debit card that I have in my wallet,” Merkley said.
• Merkley said he was pleased with a recent timber sale in the Medford area that came out of a pilot program in the Applegate Valley. Boise Cascade paid $231,000 to harvest trees on 250 acres for two years. Merkley said he hopes the work by forestry professors Norm Johnson of Oregon State University and Jerry Franklin of the University of Washington, which includes additional pilot projects in the Myrtle Creek drainage in Douglas County and in Coos County, will lead to more timber sales while improving habitat for the threatened northern spotted owl.
Merkley reiterated that he is committed to extending the federal timber safety net, which is expiring this year. He and fellow Oregon Sen. Ron Wyden have been working to continue payments to timber counties while coming up with a forest management plan that would increase logging, create jobs and generate more revenue for counties.
“This is a federal commitment to these counties that were promised money from timber sales in exchange for the loss of property taxes because more than half the land in Oregon is owned by the federal government,” he said.
• You can reach reporter John Sowell at 541-957-4209 or by email at jsowell@nrtoday.com.
