Maryland Entrepreneur Submits $1B Plan for Servicers to Pay Delinquent Mortgages

""Robert L. Johnson"":http://en.wikipedia.org/wiki/Robert_L._Johnson, founder and chairman of Bethesda, Maryland's ""The RLJ Companies"":http://www.rljcompanies.com and chairman of ""Urban Trust Holdings Inc."":http://www.urbantrustbank.com, introduced his $1 billion proposal to help homeowners avoid foreclosure during a speech at the National Housing Forum sponsored by the ""Office of Thrift Supervision"":http://www.ots.treas.gov/ (OTS) this week.
Johnson spoke before a group of representatives and regulators from the federal government, the housing activist community, bankers, and mortgage lenders, where he outlined a plan that would allow loan servicers themselves to pay the monthly mortgage payments missed by borrowers. This would give the loan servicer time to work directly with the homeowner to modify their mortgage in an effort to keep them in their homes, Johnson explained.
With the initial $1 billion government funding for the program, Johnson said he could raise another $7 billion from the private sector. Johnson said that a new entity known as Homeowners First Bank should be created through his existing minority-owned ""Urban Trust Bank"":http://www.urbantrustbank.com, for the sole purpose of handling distribution of funds to those loan servicers who would pick up the tab on delinquent mortgage payments. Through such a program, Johnson said assistance could be provided to modify 200,000 troubled mortgages each year.
""I have been concerned with the foreclosure crisis and its impact on our communities for quite some time and more often than not, low-income, underserved, and the minority communities have been disproportionately devastated,"" Johnson said. ""Our mission would be to undertake mortgage foreclosure prevention activities such as substantial loan modifications, reducing principal and interest wherever appropriate; and to ensure that such modifications and overall reductions in mortgage payments will result in protecting homeowners from losing their homes to foreclosure,"" he said.
""Today, no one is doing this at all and my organization is uniquely positioned to address this problem. I am passionately committed to addressing these issues and believe that my organization has the ability to communicate to the minority homeowner that might otherwise be resistant to or skeptical of such programs,"" Johnson said.
""The RLJ Companies"":http://www.rljcompanies.com is a diverse portfolio of organizations in the financial services, asset management, real estate, hospitality, professional sports, film production, and gaming industries. ""Urban Trust Bank"":http://www.urbantrustbank.com, the proposed parent company of the new entity Johnson is calling the Homeowners First Bank, is a federally chartered, full-service thrift with a network of branches in Florida and the Washington, D.C. region. In addition to these two organizations, Johnson is the founder of ""Black Entertainment Television"":http://www.bet.com (BET) and owner of the National Basketball Association's (NBA's) ""Charlotte Bobcats"":http://www.nba.com/bobcats/index_main.html team in North Carolina.