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U.S. Senator Calls on Big Four To Help Responsible Borrowers

Ohio Senator Sharrod Brown wrote a letter to the country’s four largest banks this week, urging them to step up the efforts in helping troubled but otherwise responsible borrowers find alternatives to foreclosure.

Sen. Brown, who is also part of the Senate’s Committee on Banking, addressed the heads of JPMorgan Chase & Co., Bank of America, Wells Fargo, and Citigroup on July 28, pointing out that one in three homes in his state is in distress and that almost a sixth of the borrowers have defaulted on their loans.

He also claimed that a “disproportionate number” of homeowners have complained about the banks’ unwillingness to cooperate under the Home Affordable Modification Plan (HAMP) and the Home Affordable Foreclosure Alternatives (HAFA), the government’s loan modification and short sale initiatives.

Sen. Brown asked the banks to consider these problems and take a look at their ability to help. He added that lenders should take more aggressive steps towards increasing responsiveness, especially to borrowers who are simply victims of the economic crash but are at nonetheless at risk of losing their homes.

Bill Faith from Ohio’s Coalition on Homelessness and Housing agreed with Sen. Brown’s statement, saying that the housing industry plays a key role in the state’s economic recovery. He added that banks and borrowers should work together to bring the real estate market back on its feet.

Sen. Brown had written to Treasury Secretary Timothy Geithner back in February with suggestions to improve the HAMP project (HAFA was released in April) to better benefit Ohio families.

Ohio ranks 48th among the states in terms of mortgages successfully modified through HAMP. Property values have fallen by as much as 40%, and foreclosures approached 90,000 in 2009.