An amendment to the financial reform bill filed yesterday [Thursday] by Sen. Al Franken, D-Minn., and Sen. Olympia Snowe, R-Maine, would create a special office to assist homeowners who are facing problems with the administration’s mortgage modification program. The measure has White House support [1], but is opposed by the financial services industry.
And:
The amendment proposes a new “Office of the Homeowner Advocate” that would be devoted to solving homeowner problems with the program. Right now, homeowners with complaints are told to call the HOPE Hotline, which has a staff of counselors to handle escalations—a process that’s been criticized as ineffective [8].
Under the amendment, all homeowner complaints about servicers would go to this new “Office of the Homeowner Advocate” within the Treasury Department. That would effectively create an appeals process for homeowners who think they’ve been wrongly denied a modification—something that housing counselors and other consumer advocates have long said is desperately needed [9].
“A mandated homeowner’s advocate, built into the process and reportable to Congress, would counteract the servicer unresponsiveness we’ve heard so much about and be able to serve as a recourse for homeowners,” said Richard H. Neiman, superintendent of banks for New York State and a member of the Congressional Oversight Panel for the TARP. Neiman has been pushing for the creation of the office.
The office would have the power to penalize servicers for noncompliance with the program’‘s guidelines, but would need the sign-off from Herb Allison, the Treasury official in charge of the TARP, to do so. The Treasury currently has the power to penalize services, but so far has not done so [10].
Read on.
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