WASHINGTON, D.C– The Senate passed an amendment offered by U.S. Sens. Al Franken (D-Minn.), Olympia J. Snowe (R-Maine), and Patty Murray (D-Wash.) to the safety net legislation now being considered on the Senate floor. The proposal will create an Office of the Homeowner Advocate, funded from existing sources, whose focus would be on assisting homeowners who believe their mortgage servicer is breaking the rules. Currently, these families have nowhere to turn when wrongly denied from the assistance program, or encounter difficulties in navigating the already stressful system of avoiding foreclosure. The amendment passed with broad bipartisan support, 63 to 33.
“Washington state families who have been hit hard by lost jobs and plummeting housing prices are fighting to stay in their homes,” said Senator Murray. “We need to make sure that the programs we put in place to help these families are actually working and that the big banks are being forced to play by the rules. Giving families a strong voice in this process is critical to preventing future foreclosures and speeding our economic recovery.”
“This victory means help for the
many Minnesotans who are in danger of losing their homes through no fault of
their own,” said Sen. Franken. “These families are doing their best in a
tough economy that they didn’t create. And they need to know there’s someone
who has their back when they’re trying to navigate the already stressful system
of avoiding foreclosure.”
“I could not be more pleased that the Office of Homeowner Advocate Amendment passed the Senate, and by a bipartisan vote. As Mainers and Americans know too well, these turbulent economic times, in which we have witnessed record high unemployment rates, have been confounded by the housing market crisis and certain mortgage servicers who are, frankly, taking advantage of our nation’s families,” said Sen. Snowe. “By creating an Office of the Homeowner Advocate, these Americans will receive the vital assistance they require when they are faced with the daunting foreclosure system.”
The Office of the Homeowner Advocate is modeled after the successful Office of the Taxpayer Advocate at the Internal Revenue Service. It aims to help resolve problems with the Home Affordable Modification Program (HAMP), a program developed by the U.S. Treasury Department to help homeowners struggling to keep their homes. It would be funded from money that is available for the costs of administering the HAMP program, but is not otherwise committed.
Those currently participating in the HAMP program and stand to benefit immediately from the Franken amendment. More could participate in HAMP if the proposal goes through, as the Office of the Homeowner Advocate would be tasked with correcting the mistakes currently denying them eligibility. As the foreclosure crisis goes on, many more people are expected to join the HAMP program, which was originally expected to help three to four million homeowners nationwide.
The Office of the Homeowner Advocate would have three primary functions: To assist homeowners, housing counselors, and housing lawyers in resolving problems with the HAMP program; to identify areas where homeowners are having problems in dealing with the HAMP program; and to identify possible administrative and legislative changes to HAMP.
The Office of the Homeowner Advocate would:
- Have an independent director, appointed by the Secretary of Treasury in consultation with the Secretary of Housing and Urban Development. This director would have a background as an advocate for homeowners and have experience dealing with mortgage servicers. The director cannot have worked for a servicer or for the Treasury Department within the past four years.
- Make the Director available to testify in front of the Senate Banking Committee and House Committee on Financial Services at least four times a year, or at any time at the request of the Chairs of either committee, and issue a formal report to Congress once a year.
- Have staff designated by the Director to have the authority, on a case-by-case basis, to implement servicer remedies, subject to the approval of the Assistant Secretary for Financial Stability. This will help to ensure that the staff of the Office of the Homeowner Advocate actually have the ability to make servicers follow the rules.