Senator Chris Dodd Calls for Improvements to Foreclosure Mitigation Program

Asks Treasury Nominee to Provide Data about Program's Effectiveness, Make Loan Servicers Accountable

June 4, 2009 -- Citing a report in yesterday’s New York Times, Senator Chris Dodd (D-CT) questioned Herb Allison, the nominee to be the Treasury Department’s Assistant Secretary for Financial Stability, about the effectiveness of the Administration’s foreclosure mitigation program at Mr. Allison’s confirmation hearing today.

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Dodd, the Chairman of the Senate Committee on Banking, Housing and Urban Affairs, requested that Mr. Allison, if confirmed, provide the Committee and the public with detailed information about how many homeowners are receiving assistance under the foreclosure mitigation plan and the extent to which individual loan servicers are complying with the program.

“First, we need good data on how many loans are being modified or refinanced…How many are being rejected for assistance in order to hold the receiver -- servicers accountable for their promises, and we need that data made public on a servicer-by-servicer basis,” Dodd said at the hearing. “I wonder if you might commit to doing that very quickly.”

“And secondly, there needs to be some process by which homeowners or consumers can raise concerns about the way the process is working. I have two thoughts on this. Either creating an ombudsman…or perhaps we ought to ask the special inspector general to oversee compliance with foreclosure prevention programs.”

Dodd added, “We don't want to wait weeks or months to find out whether or not this is working or not. The concern is it's not working as well as all of us up here would like it to work. And we need to know whether or not we need to do something, what can you do and what can the administration do to get this back on track again.”

In answering Dodd’s questions, Allison pledged to report back often on the progress of the foreclosure program, saying “I think we have to be agile as we look at this program as well. Let's see how it's working. If it's not working as effectively as it needs to, we'll make every effort to make it more efficient and more effective and to reach more people.”

Dodd sponsored the Helping Families Save Their Homes Act, legislation recently signed by President Obama that will help prevent foreclosures by expanding the Hope for Homeowners program and protect other victims of the foreclosure crisis.

Source: Senator Chris Dodd