So I want to congratulate the alliance members. This is a timely, appropriate, targeted initiative. It is a powerful and sensible action for addressing the crisis in the housing market.
This alliance works in the best interests of all parties. The American people will benefit. So will the mortgage industry. So will thousands of homeowners on the brink of foreclosure.
We all know that homeownership is part of America's economic strength. Homeownership builds equity and makes the American economy stronger, providing a foundation for our international economic leadership. But housing works in cycles. After the startling, historic boom in homeownership from 2000-2006, the recent market correction has been severe, often difficult for many new homeowners, particularly some people with subprime loans. It makes sense to even out this correction and take steps to keep people in their homes.
Of great importance, the alliance hopes to increase support for the use of housing counselors. This is a good idea. I strongly encourage the utilization of housing counselors. As you know, the President has stressed the use of housing counselors to help prospective homeowners avoid unaffordable loans. At HUD, we have discovered that housing counselors make a difference - they help people better understand their mortgages and to sign up for mortgages that they can afford. People need mortgages with no surprises, with predictable payments, and within the means of the family budget.
In fact, last week I announced $43 million in new grants for housing counselors.
So, I applaud the industry for stepping forward with this valuable alliance. This is the kind of wise leadership that Secretary Paulson and I envisioned in our earlier meeting with you. After all, foreclosure serves the interests of no one. We see here a plan for prudent, common-sense set of actions that will assist homeowners, the American economy, and the industry itself.
Thank you. It is now my pleasure to introduce Ken Wade, CEO of NeighborWorks America.
Statement by Secretary Henry M. Paulson, Jr. on announcement of New Private Sector Alliance - HOPE NOW (http://www.ustreas.gov/press/releases/hp599.htm)