On April 26th, the Congressional Progressive Caucus invited testimony from experts on the foreclosure crisis and ways to ameliorate it. Testifying at the were:
- New York State Attorney General Eric Schneiderman, who testified on the recent settlement between state attorneys-general and mortgage servicers and his Task Force’s ongoing investigations.
- John Griffith of the Center for American Progress, who spoke to the need for shared appreciation mortgages to restructure deeply underwater loans into sustainable loans, thereby preventing foreclosures and improving returns to lenders and investors.
- Ali Solis of Enterprise Community Partners, who testified to the many tools being used to prevent foreclosures and stabilize neighborhoods, including the Mortgage Resolution Fund, the Neighborhood Stabilization Program, note purchases, and other mortgage restructuring options.
A recurring theme in the hearing was a call for the Federal Housing Finance Agency to lift its blanket prohibition on mortgage modifications that reduce principal or share appreciation between borrower and lender. As both Mr. Griffith and Ms. Solis pointed out, if 1 in 4 modifications of privately-held mortgages include principal reduction, why shouldn’t the Fannie Mae and Freddie Mac loans have access to the same options?
Questions from all attending members of the Caucus showed strong support for foreclosure prevention and a desire to do more to avert the damaging cycle of disinvestment that foreclosures can trigger. Representatives Ellison (MN) and Grijalva (AZ) co-chaired the hearing, attended by Representatives Jackson-Lee (TX), Nadler (NY), Woolsey (CA), Waters (CA), Schakowsky (IL), Hinchey (NY), and Clarke (NY). Links to the hearing testimony and video will be available on the Caucus web site.