Allison Testifies for More Foreclosure Aid

""Herb Allison"":http://www.treasury.gov/organization/bios/allison-e.html, the Treasury’s new assistant secretary for financial stability and former CEO of Fannie Mae, told lawmakers at a Senate Banking Committee hearing last week that the administration is considering another housing proposal that would require lenders to allow previous homeowners to stay in their foreclosed homes as renters.
Officials say that besides providing a residence option for former homeowners, the plan would also address the glut of vacant properties plaguing neighborhoods across the country and pulling down home values.
""Sen. Charles Schumer"":http://schumer.senate.gov (D-New York), said, ""This could make sense as a last resort for troubled homeowners who would otherwise lose their homes and find themselves with nowhere to live.""
William Apgar, ""HUD’s"":http://www.hud.gov senior mortgage finance adviser, also testified that the administration is exploring foreclosure rentals as another mortgage relief option. However, he noted that in many instances, borrowers who have gone through the distress of the foreclosure process do not want to stay on as renters in the same property.
The idea is similar to a ""program launched by Freddie Mac"":http://www.freddiemac.com/news/archives/servicing/2009/20090305_reo-rental-initiative.html in March, which gives homeowners the choice to rent their homes after foreclosure. Brad German, a spokesperson for the GSE, told the ""_Washington Post_"":http://www.washingtonpost.com, though, that the company’s rental program has not attracted many participants because most former owners instead choose to accept money to voluntarily vacate under its cash-for-keys program.
The administration is also considering an initiative that would provide mortgage assistance to the growing population of unemployed homeowners.
Apgar told lawmakers at the hearing, ""The current very high level of unemployment is making the already difficult task of helping families struggling to meet their mortgage payments even harder.""