WASHINGTON, D.C., February 18, 2009 – The Obama administration’s plan to fight foreclosures provides long overdue help to Americans at risk of losing their homes, according to Consumers Union, the nonprofit publisher of Consumer Reports magazine. President Obama today unveiled a $75 billion foreclosure prevention program aimed at spurring banks to modify at-risk mortgages and empowering bankruptcy judges to ensure that mortgages are more affordable, among other reforms.
“Banks have gotten billions of dollars in aid from the federal government, but foreclosures still continue at record levels. Now it’s time to use bailout funds and the federal government’s leverage to make sure banks do more to assist homeowners at risk of foreclosure, and this plan appears to do that,” said Pam Banks, Policy Counsel for Consumers Union. “This plan offers some hope to Americans struggling to keep their homes in the face of ballooning mortgage payments and declining housing values. It helps both homeowners and their neighborhoods by helping stabilize the value of their properties.”
Consumers Union called on the Obama administration to ensure that no foreclosures occur until the new mortgage modification plan is firmly established and proven effective. As many as 3 million homes are at risk of foreclosure this year, according to industry estimates.
“All foreclosures should be halted until we know the federal government’s response is working. While we hope this reform effort will succeed at the current funding level, the administration may have to provide more funding and assistance down the line,” said Banks.