Statement of New York Superintendent of Banks and Congressional Oversight Panel Member Richard H. Neiman
Regarding Treasury’s Announcement of Housing Finance Agency Innovation Fund Guidelines for States to Develop Foreclosure Mitigation Programs
March 5, 2010
New York, N.Y.: The Obama Administration and Treasury are taking important steps forward for homeowners. They today provided details about the President’s February 19 announcement of $1.5 billion to five states in order to help struggling homeowners.
Providing financial support for states to develop foreclosure mitigation programs is critical to inspiring innovative solutions that will fill the gaps in federal programs. States are in the best position to quickly provide this urgently needed assistance to millions of families facing foreclosure today.
Today’s guidance is particularly important because it expressly encourages states to use TARP funding to develop programs to assist recently unemployed homeowners and to address the harsh reality that so many borrowers are underwater. The fierce flood of foreclosures is now being driven by unemployment and negative equity.
Foreclosures among the unemployed are particularly tragic because these families often did the right thing by entering into affordable mortgages, but they now find themselves with reduced income as a result of the nationwide recession. New state programs must provide the basis for national models to prevent foreclosures among the temporarily unemployed. Pennsylvania, Delaware, North Carolina, New Jersey, and Connecticut have demonstrated leadership by creating programs in this area, so their expertise should be leveraged by the states receiving this new federal funding as we collectively search for best solutions.
When states are empowered to innovate, they often succeed. New York and North Carolina several years ago were among the first states to require the licensing of mortgage loan originators, with strict background checks. This law then became a model for Congress’s 2008 Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) which set critical uniform, minimum standards for licensing throughout the country, with 49 states now participating.
With sufficient funding and collaboration from the Department of Treasury, states can, and must, again create a national model for foreclosure prevention.
Treasury’s proposal submission guidelines for the HFA Hardest-Hit Fund can be found at http://www.makinghomeaffordable.gov/docs/HFA%20FAQ%20--%20030510%20FINAL%20(Clean).pdf
The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.4 trillion.
In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.dfs.ny.gov.