Superintendent Richard H. Neiman's Opening Remarks at Congressional Oversight Panel Hearing on Foreclosure Mitigation Efforts under TARP
September 24, 2009
Good Morning. We are grateful to the City of Philadelphia and the National Constitution Center for hosting this hearing of the Congressional Oversight Panel. This city has been hard-hit by the foreclosure crisis - too many Philadelphians know firsthand what it means to have a home taken away.
The Panel would like to thank Senators Casey and Specter, and Congressmen Brady and Fattah and their staffs for helping to plan today’s hearing on this important issue. And special thanks to Judge Rizzo of the Philadelphia Court of Common Pleas for working with the Panel’s staff on the hearing and inviting us to visit the court this afternoon to learn more about its innovative mediation program.
The number of families at risk of foreclosure here in Philadelphia and across the country is on the increase. What started as a crisis driven by subprime borrowers with inappropriate products has now spread to include families with traditional mortgages. Even prime borrowers are now losing their homes, as a result of the downturn in housing prices and job losses resulting from in a recession that few predicted.
Today’s three panels of witnesses will convey the views of-
- the homeowners who are in jeopardy;
- the lenders and servicers who can modify mortgage terms to keep people in their homes; and,
- the government that is implementing programs to facilitate these modifications.
Only with these three groups of stakeholders working together can we can develop affordable and sustainable solutions to the housing crisis, and a greater level of engagement and cooperation is long overdue. I am concerned that the pace of modifications is not keeping pace with the rise in foreclosures. We are also hearing specific concerns from borrowers and housing counselors regarding the responsiveness of mortgage servicers.
To my knowledge, this hearing is the first time that Treasury, Fannie Mae, and Freddie Mac are together in a public forum along with housing advocates and mortgage servicers to discuss the progress of the Administration’s foreclosure prevention programs. We need to see this crisis from the perspective of those who are facing foreclosure, as well as those who are helping these families through counseling, modifications, and the judicial process.
The broad representation that we have today from the servicing industry is especially critical. Housing counselors and government agencies may design initiatives to help borrowers at-risk. But ultimately it is the servicers and lenders who will determine whether these programs succeed - they have the power to decide whether to modify a loan or to pursue foreclosure.
As New York’s Superintendent of Banks since 2007 when the crisis began, I have seen firsthand that positive results for homeowners can be achieved when the public, private, and nonprofits sectors come together with a common purpose. Foreclosure is in no one’s best interest.Because of the number of witnesses appearing today and the extensive scope of the testimony, we invite each witness to make an opening statement limited to 5 minutes. We have reviewed your written testimony, so in that 5 minute time period I strongly encourage you to highlight those points that best capture your constructive suggestions for foreclosure prevention. We do need to be strict on our time constraints in order to hear from everyone, so I will have to ask you from time to time to conclude your remarks. We would like to finish our work before 1pm, to allow members of the public time to share their brief comments with us as well.