Prepared Remarks of Secretary Shaun Donovan at the Emergency Homeowner Loan Program Press Conference

Roxbury, Massachusetts

Tuesday, October 5, 2010

Thank you. It's great to join Chairman Frank today as we announce that HUD will be providing $1 billion nationwide as part of a new Emergency Homeowners Loan Program.

We all know these are difficult times for families. When President Obama took office, we were losing an average of 753,000 jobs a month and were in the middle of 22 straight months of job loss. Credit was frozen nearly solid. And, house prices were in freefall -- having fallen every month for 30 straight months.

But from the moment President Obama set foot into the Oval Office, this administration has been pushing back against this foreclosure crisis -- developing a comprehensive plan to stabilize the housing markets and help responsible homeowners.

As a result, mortgages are now more affordable, with more than 7.2 million homeowners taking advantage of historically low interest rates to refinance, saving an estimated $150 per month on average.

Home prices have leveled off in the past year. And we've restored over a trillion dollars in home equity--close to $14,000 on average for every homeowner--bolstering seniors' retirement security, restoring an important source of college tuition support, and helping entrepreneurs start small businesses.

And over the last 19 months, more than 3.3 million borrowers have received restructured mortgages -- more than twice the number of foreclosures completed in that time.

But the job isn't over. Too many of you, here in Massachusetts and across the country, are still looking for work and wondering if you will be able to make your next mortgage payment.

With the Dodd-Frank Wall Street Reform bill Chairman Frank passed this summer, we did so much to put an end to the bad behavior that got us into this crisis.

Dodd-Frank increased oversight for the mortgage industry. It closed loopholes and ensured lenders would have not only profit from the home loans they make -- but have a stake in their performance. And, above all, it established the strongest consumer financial protections in our country's history.

At the same time, Dodd-Frank provided important new tools to help us stabilize hard-hit neighborhoods and help responsible homeowners.

And let's be clear -- where bad loans were driving foreclosures when this crisis started three years ago, today it's the damage those bad loans inflicted on our economy. As a result, countless people who have lost their jobs through no fault of their own temporarily lack the steady income they need to pay their mortgage.

That's why the Emergency Homeowner Loan Program will provide limited and targeted assistance to working families -- providing bridge loans of up to $50,000 that help families get back on their feet and keep their home while they look for work.

The Treasury Department's Hardest Hit initiative targets certain states.

But we all know that folks in every state are hurting right now. That's why the effort I am announcing today targets assistance to struggling unemployed homeowners in states like Massachusetts -- which will receive more than $61 million through this initiative.

Representing a combined $8.6 billion, the investment flowing from these two efforts will ultimately help a broad group of struggling borrowers across the country by giving them the relief they need to stay in their homes.

And to ensure these resources reach the families and communities that need it most, HUD is joining forces in this effort with NeighborWorks America -- a national network with more than 230 community-based partners in all 50 states.

Their participation reminds us once again that whether it is their ability to provide financial counseling, encourage economic development, or connect struggling homeowners to the assistance they need, HUD's vast network of housing counselors is one of our greatest strengths.

Obviously, the Emergency Homeowner Loan Program is only one important tool in our toolbox as we fight to continue our nation's economic recovery. And it won't help every family struggling to keep their home.

But with new funding and a new commitment to helping responsible homeowners who have fallen on tough times, President Obama, Chairman Frank and I believe we can tackle tough challenges. We can fight foreclosures and unemployment. And we can help our communities recover.

That is what this effort is about today -- and it's why I'm proud to be a part of it.

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