The Republican Legislatures Want to Eradicate All the Foreclosure Prevention Plans

Although critics have been harsh on Obama’s foreclosure prevention programme of HAMP they laud the federal programme of Hardest Hit Fund with a fund of $7.6 billion. The dollars would be given to those states that have been worst hit by the foreclosure epidemic. From it 70% would be for the unemployed house owners, informed Treasury spokeswoman Andrea Risotto. Till now $455 million has been used. Over the previous many years housing advocates, academics and economists of the government have given proposals to the Treasury to help unemployed house owners to avoid foreclosure. One of these proposals had been crafted by Jeffrey C. Fuhrer, (executive vice president) of Federal Reserve Bank of Boston. He knocked on the government to sanction grants or loans both to the unemployed and under-employed house owners to compensate for the income that they had lost. The condition was that the loan would be returned when the person regained employment. Another proposal was made by PICO National Network, a non-profit organization consisting of a coalition of community groups founded on faith. They wanted that the unemployed victims facing foreclosure should be permitted to postpone a good part if not all their mortgage dues for a year or even more. But the government retreated on such suggestions on the plea that the regulators and “other industry stakeholders expressed strong reservations” about giving the green signal to unemployed parents to defer their mortgage payments for longer periods. To this effect a letter dated 23rd December was sent by the Treasury Secretary, Timothy Geithner to Rep. Barney Frank (Democrat/Massachusetts). The latter had pressed for the taking of steps that would have directly helped the unemployed. The debate along party lines is being played out in Washington. The Republican legislatures have made it quite clear that they wanted to eradicate all the foreclosure prevention plans while blocking any new suggestions. The government officials are sticking to their old stand that it is up to the mortgage group to take decisions about modification and not the administration. James Parrott, (senior adviser – White House’s National Economic Council) said, “We as an administration have limited levers. We can push them on the margins”. But PICO organizer Lewis Finfer said he failed to understand how and why the government has remained relatively cool considering the gravity of the staggering unemployment problem. He said that they “have a programme to deal with this”.