WASHINGTON - Thank you, Tim, for that kind introduction, and I
want to thank you and your staff for organizing this important summit. I also
want to thank all of you for coming to Treasury today. This summit has been a
great opportunity for those who care about housing and what it means to
families, neighborhoods, and our economy to come together and help make our
policies and programs more effective.
More than five and a half years
ago, a devastating housing crisis helped ignite the worst recession of our
lifetimes. By the time the President took office, the housing market was
spiraling out of control. Home values were plummeting, construction workers
were losing their jobs, the number of Americans behind on their mortgages was
at a record high, and foreclosures were mounting.
To stabilize the market, the
President began moving right away to help distressed homeowners. That led to
the creation of the Making Home Affordable program. This innovative program has
provided relief to homeowners across the country, including more than a million
homeowners who have been able to permanently modify their mortgages through
HAMP and save roughly $540 a month in mortgage
The Making Home Affordable program
is not just helping families keep their homes, it is giving families peace of
mind. And I would like to take a moment to congratulate the men and women who
have made this program a lifeline for so many Americans over the past five
years. Let me say on behalf of everyone here, thank you for your hard work.
A home is one of the most important
investments a family ever makes. Earlier today, I met with homeowners and
housing counselors at the Greater Washington Urban League and discussed with
them how our programs are helping Americans get back on their feet.
And they were clear: While our
programs are, indeed, having a real impact, very important challenges remain.
These homeowners, like many others, remain optimistic but continue to worry
about what the future will bring for themselves and their neighbors. The truth
is, when you work hard, act responsibly, and play by the rules, you should not
have to live in fear that you are going to lose your home.
Now, as we know, our initiatives
have not been a silver bullet. But HAMP and our other programs cannot be judged
only on what they have done directly for homeowners. Treasury’s housing
assistance programs have become a model for the broader housing sector, setting
a standard for the mortgage industry on how to restructure loans and help
homeowners. In fact, more than 5 million homeowners have been helped by private
lenders who in many cases have used a similar framework to the one created by
Our work has also triggered new
industry norms such as requiring a single point of contact for the homeowner,
restricting the pursuit of a foreclosure when working with a family on a
modification, and letting unemployed homeowners delay their mortgage payments
for at least six months.
This kind of collaboration and
collective action has transformed the way the mortgage industry assists
struggling homeowners, spurred the development of new tools to aid communities,
and helped reverse the worst housing downturn since the Great Depression.
Now, Making Home Affordable has
been just one component of the Administration’s comprehensive effort to heal
the housing market. We have taken numerous other steps, including streamlining
FHA’s refinancing program to make it easier for homeowners to refinance their
mortgages and creating HARP, which has helped more than 3 million people
refinance their homes. And even as we have focused on refinancing, we have made
strides to give states and communities that are suffering a boost by
establishing the Hardest Hit Fund.
In April, I traveled to Detroit,
and I witnessed firsthand how the Hardest Hit Fund is making a difference. For
the first time under this program, workers were tearing down abandoned
buildings to revitalize a community. The fact is, a foreclosed sign in front of
one home can pull down the value of every home around it. And an abandoned
building can cause a once-stable neighborhood to slip into a downward spiral.
On these blocks and in these neighborhoods, the Hardest Hit Fund is providing families
with a second chance.
Still, our work is not done. Two
weeks ago, in a speech at the New York Economic Club, I highlighted the plight
of the long-term unemployed. Construction workers are disproportionately
represented within the ranks of the long-term unemployed largely due to the
struggling housing market. Middle class families continue to have a difficult
time finding affordable housing. And more than 6 million Americans still owe
more on their homes than their homes are worth.
That is why we remain focused on
providing relief to responsible homeowners, rebuilding hard-hit communities,
and reforming our housing finance system.
To that end, I am announcing today
that Making Home Affordable will be extended for at least another year. We need
to continue to be there for homeowners who are facing foreclosure, those who
are struggling with increasing interest rates on their modified mortgages, and
those whose homes are caught underwater.
At the same time, we need to
develop new solutions for credit-worthy families who want to buy a home but
continue to get rejected by lenders. There are still millions of Americans with
good credit who cannot get a mortgage. FHFA and FHA have recently announced
meaningful steps to help improve lender confidence in making GSE and FHA backed
loans, but we have to do more to make sure our markets are effectively serving
potential home buyers. This includes fostering the development of a safe and
sustainable private market for mortgage lending that can serve alongside
government-supported options. The private label securities market has been
dormant since the financial crisis.
The fact is, we need to attract
more private capital to the housing market, and that is why I have directed my
team to bring investors and securitizers together in the months ahead so we can
uncover new paths to increase private investment. As part of this effort, we
are posting questions on our website today intended to help us better
understand what we can do to encourage a well-functioning private
As we make it easier for
responsible homebuyers to get credit, we also need to make sure families who do
not want to buy a home or cannot afford to buy a home have access to affordable
rental housing. Renting is the right choice for many Americans, and there is
more we can do to support renters.
Today, I can announce that we are
taking an important step to increase the availability of affordable rental
housing. Under a new partnership between Treasury and HUD, we will help create
and preserve quality rental housing by reducing the interest rate for
affordable multi-family apartment buildings. We will do this by supporting the
Federal Housing Administration’s multifamily mortgage risk-sharing program,
which helps drive construction and rehabilitation of rental housing.
The Administration has urged
Congress to permit Ginnie Mae to securitize FHA risk-sharing loans. But until
Congress takes action on new legislation, I am directing the Federal Financing
Bank to use its existing authority to finance these FHA-insured mortgages.
And right now, we are working with
the New York City Housing Development Corporation to close the first project
under this initiative this fall. With this project, we will help rehabilitate
affordable rental housing in Far Rockaway, Queens that was damaged by
While we remain committed to
helping secure affordable and sustainable housing for all Americans, we cannot
act alone. Congress needs to extend the Mortgage Forgiveness Debt Relief Act so
struggling families that have lost their home to foreclosure or that have sold
their home in a short sale in order to move into more affordable housing are
not punished with a large tax bill.
At the same time, it is time for
Congress to pass housing finance reform. The work in the Senate Banking
Committee was an important milestone on the road to reform, but lawmakers need
to keep moving forward. We know we can create a better system that provides
responsible Americans with mortgage credit while supporting affordable rentals
for those who choose not to buy. We can create that system without putting
taxpayers at undue risk, but we need Congress to act. Passing legislation is
the only way we can achieve meaningful and sustainable housing finance reform.
Before I close, let me say that all
of you are here today because the onset of the crisis found the financial
industry unprepared to deal with millions of troubled homeowners. As many of
you will recall, during the depths of the housing crisis, homeowners were
calling lenders looking for help, and lenders did not know what to do with
But because we have worked
together, we have been meeting the needs of distressed homeowners. As we look
ahead, we must recognize that eventually Treasury’s direct involvement in the
mortgage industry will end. That means we must think about how we can continue
to reach borrowers who need assistance. MHA created standards for communicating
with delinquent borrowers that the CFPB and others will carry forward, but we
will need to make sure our commitment to reaching families who are in trouble
With that, let me thank you for
coming to this summit. We now begin the next chapter of our work together. And
I look forward to continuing this conversation and achieving great things with
all of you.