FOR IMMEDIATE RELEASE

1/27/2012

Contact: Gordon Whitman, PICO, 202-427-2992

Faith groups to President Obama:  Real relief for underwater homeowners is the true test of any settlement with the big banks PICO National Network released the following statement from PICO Executive Director Scott Reed in response to today’s developments in the housing crisis: 

Washington, DC – Today’s announcement by the Obama Administration that it is increasing incentives for banks to reduce principal for underwater homeowners, is a belated recognition that no effort to restart the American housing market will succeed without reducing the massive debt load carried by families who were the real victims of the financial crisis.

President Obama must follow through by changing the obstructionist leadership of the Federal Housing Finance Agency (FHFA), which has repeatedly sided with big banks over the needs of families by refusing to allow any principal reduction.   The President must also listen to courageous Attorneys Generals in California and other hard-hit states by insisting that any agreements with Wall Street deliver large-scale debt reduction to underwater homeowners and not bargain away the right to hold banks accountable for their misdeeds.

PICO and our allies in the New Bottom Line believe that meaningful relief that does justice to the victims of the financial crisis and restarts the housing market must remove $300 billion in principal overhang and provide $50 billion in compensation to families who have lost their homes.
 
PICO is encouraged by the decision to ramp up the investigation into illegal practices in the origination, packaging and servicing of mortgage loans. Our standard for these investigations is whether they provide actual relief to families commensurate to the damage caused by Wall Street. As a network representing more than 1,000 religious congregations and more than 1 million families, many of whom are underwater and at-risk of losing their homes, PICO is encouraged that the U.S. Treasury is tripling incentives for banks to reduce principal, offering these incentives to Fannie Mae and Freddie Mac loans, and expanding eligibility for the HAMP foreclosure prevention program.

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PICO National Network is the largest grassroots, faith-based organizing network in the United States. More information at www.piconetwork.org.