We’ve heard of rent-to-own, but some troubled homeowners might have to go the other way around. The Treasury Department is considering a proposal to allow foreclosed homeowners to stay in their homes as renters, a department official told the Senate Banking Committee yesterday.
In considering the idea, the Treasury Department is essentially admitting that the federal Making Home Affordable program for mortgage modifications and refinances won't be able to help enough homeowners, the Washington Post reports. We at ProPublica, and others, including the Treasury Department itself, have reported that the Making Home Affordable program has been slow to take hold as foreclosures and unemployment grow.
The hearing got heated, with the official, Assistant Treasury Secretary Herb Allison, facing intense pressure from both Democrats and Republicans. Senators expressed dismay at the slow pace of loan modifications, grilling Allison and HUD senior advisor William Apgar as well as executives from Bank of America and Wells Fargo.
The Associated Press reports that Sen. Jim Bunning, R-Ky., repeatedly asked, "When are you going to stop the bleeding?"
Complaints ran the gamut, from uneven and inaccurate customer service to limited options for homeowners who are unemployed or have second mortgages. Diane Thompson from the National Consumer Law Center called for greater transparency and accountability, specifically for independent review of modifications that have been denied as well as for making public the calculations that determine when modifications are allowed.
Other news this morning:
Hank Paulson Admits to Threatening Ken Lewis (Politico)
House Wants Dealerships Reinstated (WSJ)
CIT, Clients Scramble to Secure Lifelines ($) (WSJ)
SEC Chairman Requests Broad Investigative Power (WaPo)