FOR IMMEDIATE RELEASE
March 26, 2010

Contact: Lew Finfer, MCAN, 617-470-2912 | Tim Lilienthal, PICO, 413-537-0631

OBAMA ADMINISTRATION, TREASURY, HUD HIT "SINGLES" ON TWO FORECLOSURE ISSUES BUT "STRIKE OUT" ON HELP FOR MILLIONS OF UNEMPLOYED HOMEOWNERS

Today, the Obama Administration announced a package of improvements to the ailing HAMP (Home Affordable Modification Program) program in an effort to help more homeowners save their homes through loan modifications.  But while there is good news in that announcement, there's also some continuing bad news.

The Administration deserves thanks for taking two big steps:

• Putting in place protections against banks moving forward on the foreclosure process while homeowners are in the midst of applying for a loan modification;
• And developing two programs and allocating $14 billion in TARP funds to assist the many "underwater" homeowners who find themselves owing more than their house is worth.

However, PICO is greatly disappointed and disheartened that the Obama Administration is offering little hope to unemployed homeowners - the largest and fastest growing group of homeowners facing foreclosure.

Unemployed homeowners face particular challenges around foreclosure, since they are not eligible for a loan modification under HAMP.  For many months, PICO has been meeting with and asking the Obama Administration to develop a loan program to help homeowners save their homes until they find new employment and can then pay back the loan.  Unfortunately, the Administration doesn't seem to grasp the urgency of addressing this group of homeowners in a way that takes into account not just the current dilemma but the future consequences - to family, community, and nation -- that will come from assistance inadequate to the enormity of the problem.

For this group of hurting homeowners, the only help the Administration is proposing is a 3-month or so forbearance period, followed by an embarrassingly small "consolation prize" of $3,000 toward moving costs if the unemployed homeowner gives up and moves by doing a short sale.  Such an offer suggests that the Administration doesn't yet grasp the depth of the problem.

According to the government's own statistics, the average length of official unemployment has increased to 24.5 weeks (close to 6 months), the longest since government began tracking this data in 1948.  And the number of long-term unemployed (those unemployed for 27 weeks or long) has jumped to 4.4. million, an all-time high.

Pastor Lucy Kolin, a PICO spokesperson from Oakland, CA, stated:  "PICO hears and holds the stories of suffering and pain of unemployed homeowners and will continue to stand with those who face the prospect of losing their homes.  We join them - many our own families and neighbors -- in saying:  we are not moving, we seek not a grant or a hand-out, but loans to keep our families in our homes and provide stability to our communities. Why should our only option be to get a job in three months or move?"

"Unemployed homeowners deserve to be able to borrow some of the billions of TARP funds remaining, funds the government was willing to loan to big banks.  We have watched as big banks and Wall Street investment companies took the money, then turned around and paid themselves billions in bonuses.  And now we find ourselves unemployed because of their unethical actions and bad decisions and with no good options.  We will continue to work for better decisions, better policies, and better programs that can provide real hope and real help."

This past week, as a result of the court case brought by 14 Attorneys General against Bank of America, the bank agreed to a new program of principal reduction to save approximately 45,000 victims of predatory lending from foreclosure.  That is one positive step, but Bank of America and the other banks need to take more steps to prevent millions of other foreclosures from moving forward.

The PICO National Network is a faith-based community improvement organization made up of 52 affiliates in 17 states.  PICO has been organizing for the past two years to develop solutions to the foreclosure crisis.