LULAC National Veteran's Summit
"Saluting America's Heroes"


I always enjoy coming to this beautiful city, the hometown of my distinguished predecessor at HUD, Henry Cisneros.

I thank LULAC for putting together this summit, and for inviting me to join you.

I want to take this opportunity to thank Lieutenant General Ricardo Sanchez for his inspiring words and, even more inspiring, his service to our country.

To all of the veterans and their families in the audience, I thank you from the bottom of my heart.

It's because of people like you, protecting America's freedom, that we are able to talk about protecting the American Dream. Thank you.

I want to start by telling the story of another veteran of the war in Iraq, Marine Lance Corporal Jos� Gutierrez.

If the name isn't familiar to most Americans, it should be. He was one of the first combat casualties of the war, and the first Marine to die in battle.

An orphan from Guatemala, Jos� came to California as a teenager and was granted U.S. citizenship after his death.

Jos� wanted to be an architect and build his own home. Sadly, that will never happen. But his story shows us the importance of confronting our fears and doing our duty.

His foster mother said Jos� felt his duty was to give back to his adopted country for all the opportunities it gave him.

Many of you no doubt feel the same way.

Some of you have parents or grandparents who overcame their own fears to come to America. They wanted the opportunity to work hard, raise a family, and maybe save enough to build or buy a home. The American Dream was homeownership. It still is.

So today, we must confront our fears and work together to keep it that way�by making the Dream a reality for more Americans.

I thank LULAC for inviting mortgage industry leaders to this Summit to help find ways for our veterans and their families to keep their homes. I assure you that HUD is doing its part.

By the way, I want everyone to stay tuned in the days ahead for some important announcements about affordable housing for our veterans in the upcoming budget.

But for now, I want to talk about our fight to prevent home foreclosure.

The fight begins at home, with the family.

No one works harder than the U.S. soldier with one exception: his or her loved ones. You're the ones who juggle the bills and fill out the paperwork.

You're the ones who have to raise your children shorthanded�and make the best decisions for your family.

One of those decisions is whether to buy a home. Many of you hear conflicting voices. You see the headlines warning of a recession, which the media is doing its best to talk us into. You hear about the explosion of risky subprime mortgages, and the rising number of defaults.

At a recent presidential debate sponsored by Univision, the moderator said that �one out of every 12 Hispanics will lose their home because of the mortgage crisis.� You may know friends or family members struggling to pay a low-interest loan that has reset at a much higher rate. Or you may be struggling yourself.

At the same time, you also see the good news. A new, bipartisan stimulus plan. A dramatic cut in interest rates. Fifty-one straight months of job growth. Houses becoming more affordable. Hispanic homeownership rising above 50 percent, a record.

According to the National Association of Hispanic Real Estate Professionals, between 1995 and 2005, new Hispanic homeowners rose an astounding 81 percent, compared to 19 percent for all other Americans.

Good news, bad news�I don't blame you for being confused!

Whatever decision you make on a home, the most important thing is to be prepared and informed. That means becoming financially literate.

This week, President Bush signed an executive order creating the Advisory Council on Financial Literacy. It will help Americans read and understand the fine print before they sign on the dotted line. And HUD is playing a leading role.

We've put out a brochure called �Home Economics.� It details the five steps Americans need to take to become financially literate and prepared to own a home, and who to call for help.

We have versions in both English and Spanish, and are in the process of sending four million copies out across the country.

One of the most important steps is to communicate with your lender�especially if you fall behind on your mortgage payments.

I understand that it's human nature to want to disappear during difficult times. But it never helps. Surveys show that about half of homeowners in foreclosure did not discuss it beforehand with their mortgage counselor or servicer.

Of course, when homeowners do try to communicate with their lenders, they sometimes find themselves talking to total strangers. Many mortgages are sold, resold and repackaged. It can be difficult to tell who's in charge.

At the same time, a home prospectus may run a hundred pages long�with the bad news buried on page ninety-nine!

I'm reminded of what a humorist once said: �Why is it you can always read a doctor's bill, but you can never read his prescription?�

The good news is, nobody wants foreclosure�including the mortgage industry. Several months ago, Treasury Secretary Paulson and I asked the industry to come together, to identify past due homeowners who are willing to do what it takes to stay in their homes.

The result was the HOPE NOW Alliance. Companies representing 90 percent of the subprime loan market are now helping 370,000 homeowners refinance or restructure their loans.

Calls to the HOPE NOW hotline�listed in this brochure�are at all-time highs. More importantly, the number of homeowners who have contacted their lender has risen from two percent to sixteen percent. Still low, but going in the right direction.

The Alliance has announced a three-part mortgage relief plan for homeowners. The first option is to refinance an existing loan into a new private mortgage.

The second option is to move homeowners into an FHA loan under our new FHASecure plan.

And the third involves freezing the current interest rate for five years�the so-called �Teaser Freezer.�

We estimate that 1.2 million Americans could be eligible for relief under one of these options.

Let me tell you more about FHASecure. It's a new product from HUD's Federal Housing Administration, which insures low-cost, safe home mortgages. Under FHASecure, for the first time, people with subprime loans who are behind on payments as a result of reset interest rates could refinance into the FHA.

We're also allowing FHA to help homeowners in the process of foreclosure, and others who are �underwater��in other words, they owe more than the house is worth.

Are there rules? You bet. We require a history of on-time mortgage payments under the original interest rates. Homeowners must have a sound debt-to-income ratio. And multiple home-flipping speculators do not qualify.

Since President Bush announced FHASecure in August, we've helped nearly 75,000 homeowners stay in their homes. We could help hundreds of thousands more in the coming year. But we cannot do it alone.

We've called on Congress to address the subprime mess for two years now. We've asked them to pass legislation to permanently modernize the 74-year-old FHA so we can help more homeowners.

This means raising FHA's loan limits so it is no longer priced out of expensive markets such as California, New York, and Northern Virginia. We also want Congress to lower FHA's downpayment requirements and introduce �fair pricing� of insurance.

Taken together, this reform package would bring the FHA into the 21st century, and break the vicious cycle of foreclosure and depreciation. In Texas, more than a thousand families a month could be helped. Congress must act.

Of course, even when a family does the right thing, they can still find themselves victimized by predatory lending.

One study found that high-income Hispanic homebuyers are more than twice as likely as high-income whites to be steered into a subprime loan.

Some lenders target consumers with deceptive and shady practices such as �balloon payments� and �liar loans.� A huge number of subprime loans were issued without loan verification. One lender even bragged about his �NINJA� loans�that stands for �No Income, No Job and No Assets.�

HUD has called on the mortgage industry to adhere to the highest ethical standards and to conduct business with honesty and transparency.

Our new Fair Lending Division is now open for business, investigating complaints of predatory lending.

And last month, the Federal Reserve approved new Truth in Lending regulations that ban �liar loans� and other abuses.

Recently, the National Association of Hispanic Real Estate Professionals announced a professional Code of Trust. I salute them.

Predators feed on fear. They know that personal trust and loyalty are key factors in the buying process, especially for first-time buyers. They also know that many people in the community distrust traditional banks and lenders. So they fill the vacuum.

We must fight back. Let me tell you about our housing counseling program. We strongly believe in it.

There are more than 2,300 HUD-approved counseling agencies, educating families about their rights and responsibilities. Through them, we are building relationships of trust at the community level.

HUD has held dozens of foreclosure prevention workshops across the country so counselors can learn your stories and find ways to help.

Our non-profit partner NeighborWorks has held others, including one here in San Antonio.

When I say we support housing counseling, I mean it. President Bush has increased funding for it by 150 percent since 2001.

Last year we asked Congress for another $50 million for the coming fiscal year, and we got it. Another $180 million is going to NeighborWorks to help prevent foreclosures. It's money well spent.

The values our veterans fight for in Iraq are the same values that provide the foundation for homeownership. Freedom. Opportunity. Sacrifice. Ensuring a better life for our children.

These are the values that sustain us.

My father worked at a lead smelter in West Dallas every day. At night he cleaned buildings. I got up every morning at 5 a.m. to eat breakfast with him in our rare moments alone.

He set a great example for his family. And I am proud to carry on his legacy by fighting for the American Dream�el Sue�o Americano.

There are some critics who look at one part of the housing market and conclude that the Dream is a mirage.

They're dead wrong. Owning a home remains one of the surest paths toward independence and wealth creation. It contributes to the health, safety, security, and stability of our families, our communities, and our country.

If that isn't worth fighting for, then nothing is. Thank you.

Note: To read the Press Release, visit


Content Archived: January 12, 2012