Prepared Remarks of Secretary Shaun Donovan at a Memphis Press Conference With Attorneys General Cooper and McDaniel

Memphis, Tennessee
Tuesday, April 11, 2012

Thank you, Mr. Mayor -- for that introduction and for your leadership on behalf of Memphis families and businesses. I also want to thank Dexter Muller and the Chamber for their partnership.

Thank you all for joining us today. I'd like to particularly recognize and thank Mayor Wharton for his leadership, as well as Attorneys General Cooper and McDaniel for their commitment to pushing back against the economic crisis.

It's a crisis that hit local families hard -- particularly in communities of color. Indeed, near the height of the crisis the median income of black homeowners in Memphis fell to a level not seen since 1990.

But with the partnership of leaders like Mayor Wharton and Attorneys General Cooper and McDaniel, the Obama Administration has made real progress for our families.

In the last two years, the economy has added more than 4 million private sector jobs, while the number of families falling into foreclosure has been cut in half.

And almost 6 million families have received mortgage modifications that have helped them stay in their homes.

But know we have to do more to speed growth and help struggling families. Indeed, with 1-in-10 Arkansas homeowners and almost 1-in-6 Tennessee homeowners underwater on their mortgages, families in this region need more relief.

And thanks to the historic, $25 billion settlement that federal officials and a bipartisan coalition of 49 state attorneys general struck with the five largest mortgage servicers, they're going to get it.

Providing tens of billions in direct relief for struggling homeowners, the settlement will reduce principal balances for homeowners, help families who are underwater refinance their loans -- and provide billions of dollars for critical priorities like housing counseling and anti-blight efforts.

And just this past week, a federal court gave the final approval to the settlement -- ensuring that hard-working Americans will soon start to see its benefits.

So, I'm proud of the work we did with Attorneys General Cooper and McDaniel to reach this settlement.

But I'm even prouder of the work they're doing to ensure families get the most out of it.

That starts with speeding help to homeowners -- and the best way to do that is through housing counseling.

Housing counseling has a proven track record of stopping foreclosures and ensuring families aren't taken advantage of by unscrupulous lenders.

Before the ink was even dry on the settlement, we began hearing stories about scams in which people are told that for $2,000 they can qualify for assistance.

Families need to know that help from a HUD-approved housing counselor is available free of charge. And I would encourage anyone who needs help to go to HUD's website to find a housing counselor who can work with you.

Housing counselors have assisted 8 million people over the last 3 years.

That's why we fought hard for housing counseling funds in HUD's budget -- and it's why we also ensured that settlement would provide $2.6 billion directly to states that can be used for counseling or other resources or other critical anti-foreclosure resources.

And I'm proud to stand with two leaders who are committed to using these dollars to help struggling homeowners.

And we are encouraging Attorneys General from all 49 states that received funds from this settlement to follow their lead.

Second, it's critical that we let families who may have suffered even deeper harm know their rights.

For these families--who believe they never should have lost their home in the first place, and could be owed hundreds of thousands of dollars in damages--it's important that we let them know the settlement preserves their ability to get every cent of the compensation they are entitled to -- either by requesting a review of their file or by taking their servicer to court.

Indeed, federal regulators have already set up a hotline for families who think they may have been wrongfully foreclosed on. If these families call 1-888-952-9105, they can request their foreclosures be included for official review -- at the banks' expense.

Finally, we need to let families know their rights going forward.

One of the most important features of this settlement is that it creates new customer service standards to protect families -- standards in keeping with the Homeowners Bill of Rights recently announced by President Obama.

That means that at the same time, the Consumer Financial Protection Bureau is working to put in place commonsense rules that families to count on when they are trying to buy a home, the standards in this settlement will give homeowners confidence that lenders and servicers are following a comprehensive list of rights should they ever lose a job or, god forbid, have a medical emergency that puts their home at risk.

Of course, one settlement is not going to solve all the problems of our housing crisis.

Still, by putting in place the most ambitious mortgage relief effort in history, for homeowners that help isn't just "on the way" -- but it is here.

Our job now is to ensure people know where to find it. And because of the leadership and commitment to Tennessee and Arkansas families shown by Attorneys General Cooper and McDaniel, more people will.

That's what today's meeting is about -- and it's why I'm proud to join them here in Memphis today. Thank you.

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