(Washington, D.C.) – U.S. Sens. Al Franken (D-Minn.), Patty Murray (D-Wash.)
and Olympia J. Snowe (R-Maine) yesterday filed a bipartisan amendment to the
safety net legislation now being considered on the Senate floor. The proposal
would create an Office of the Homeowner Advocate, funded from existing sources,
whose focus would be on assisting homeowners who believe their mortgage servicer
is breaking the rules. Currently, these families have nowhere to turn when
wrongly denied from the assistance program, or encounter difficulties in
navigating the already stressful system of avoiding foreclosure.
The Franken-Murray-Snowe amendment had been originally introduced during the
Wall Street Reform debate, but although it enjoyed bipartisan support, and the
support of the White House and Treasury Department, it was not granted a vote
at that time.
“Too many Minnesotans have lost their jobs through no fault of their own,
and are now in danger of losing their homes,” said Sen. Franken. “When
they feel they’re being treated unfairly, they need to know there’s someone who
has their back. My proposal creates an office dedicated to these families.
They’re doing their best with an incredibly stressful situation in a tough
economy that they didn’t create, and we ought to do what we can to help them.”
“For far too many Mainers and Americans, these turbulent economic times, in
which we have witnessed record high unemployment rates, are confounded by the
housing market crisis and certain mortgage servicers who are, frankly, taking
advantage of our nation’s families,” said Sen. Snowe. “By creating
an Office of the Homeowner Advocate, these Americans will receive the vital
assistance they require when they are faced with the daunting foreclosure
system.”
“Millions of families across the country are fighting to remain in their
homes, many of whom are the victims of false promises made by big banks that were
chasing profit while ignoring risk,” said Sen. Murray. “We need to make
sure that the programs we put in place to help these families are actually
working and that the big banks are being forced to play by the rules. Giving
families a strong voice in this process is critical to preventing future
foreclosures and speeding our economic recovery.”
The Office of the Homeowner Advocate is modeled after the successful Office of
the Taxpayer Advocate at the Internal Revenue Service. It aims to help resolve
problems with the Home Affordable Modification Program (HAMP), a program
developed by the U.S Treasury Department to help homeowners struggling to keep
their homes. It would be funded from money that is available for the
costs of administering the HAMP program, but is not otherwise committed.
18,450 Washingtonians currently participate in the HAMP program and stand to
benefit immediately from this amendment. More could participate in HAMP if the
proposal goes through, as the Office of the Homeowner Advocate would be tasked
with correcting the mistakes currently denying them eligibility. As the
foreclosure crisis goes on, many more people are expected to join the HAMP
program, which was originally expected to help three to four million homeowners
nationwide.
The Office of the Homeowner Advocate would have three primary functions: To
assist homeowners, housing counselors, and housing lawyers in resolving
problems with the HAMP program; to identify areas where homeowners are having
problems in dealing with the HAMP program; and to identify possible
administrative and legislative changes to HAMP.
The Office of the Homeowner Advocate would:
- Have
an independent director, appointed by the Secretary of Treasury in
consultation with the Secretary of Housing and Urban Development.
This director would have a background as an advocate for homeowners
and have experience dealing with mortgage servicers. The director
cannot have worked for a servicer or for the Treasury Department within
the past four years. - Make
the Director available to testify in front of the Senate Banking Committee
and House Committee on Financial Services at least four times a year, or
at any time at the request of the Chairs of either committee, and issue a
formal report to Congress once a year. - Have
staff designated by the Director to have the authority, on a case-by-case
basis, to implement servicer remedies, subject to the approval of the
Assistant Secretary for Financial Stability. This will help to ensure that
the staff of the Office of the Homeowner Advocate actually have the
ability to make servicers follow the rules.
Nationally,
Americans for Financial Reform, Center for Responsible Lending, National
Consumer Law Center, the Leadership Conference on Civil and Human Rights,
Consumers Union, Consumer Federation of America, and National Council of La
Raza all support the Franken amendment.
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