FOR IMMEDIATE RELEASE
Thursday, March 26, 2009
CONTACT: Alexis Marks or Mara Lee
Rep. Doris Matsui Introduces Legislation to Help Homeowners Living in Distressed Areas Modify Their Mortgages
Bill calls on returned TARP funds to be re-directed to help homeowners
WASHINGTON, DC – Following up on her letter to Treasury Secretary Geithner, Congresswoman Doris Matsui (CA-05) introduced legislation today calling for any Troubled Asset Relief Program (TARP) funds that are voluntarily returned to the federal government be re-directed to President Obama’s ‘Making Home More Affordable’ housing program. The bill, Helping Homeowners in Distressed Communities Act of 2009, specifically re-allocates all returned TARP funds to help homeowners living in areas disproportionately affected by foreclosures, such as Sacramento, modify their mortgages under the President’s foreclosure plan.
Over the last few weeks, several financial institutions have notified the Treasury Department of their intentions to voluntarily return taxpayer-assistance received from TARP. These institutions include Bank of America, Goldman Sachs, U.S. Bancorp, Wells Fargo, and a number of small financial organizations. Some of these banks have cited TARP conditions, including executive compensation rules, for wanting to return the TARP money.
“I want to ensure that the federal government devotes as many resources as possible to help the housing crisis. If banks want to voluntarily return TARP funds, then that money should go to help responsible homeowners keep their homes in areas severely affected by the foreclosure crisis, like Sacramento,” said Rep. Matsui.
Also joining Rep. Matsui in introducing this legislation are Kathy Castor (FL-11), Shelley Berkley (NV-01) and Betty Sutton (OH-13), who all represent states that have been severely impacted by the housing crisis. In these states, home values are severely underwater and some homeowners have second liens. Many homeowners also do not have loans held by Fannie Mae and Freddie Mac, therefore making it difficult for them to receive assistance under President Obama’s plan. These additional funds could increase resources in order to help more principal homeowners in severely affected areas to stay in their homes under the President’s foreclosure plan.
“All principal borrowers, in all parts of the country, should be able to qualify for a new affordable loan under the President’s foreclosure plan,” Rep. Matsui said. “I believe the President’s program is the strongest foreclosure mitigation plan to date. We need to stabilize the housing market, not only for the sake of our economy, but for the good of our neighbors, communities, and state and local governments. Homeowners in Sacramento and California in general need additional resources to help stabilize our communities.”
The letter submitted by Congresswoman Matsui and her colleagues is below.
<<Sec. Geithner Letter re-Returned TARP Funds.pdf>>