Housing and Urban Development Secretary Shaun Donovan on Tuesday touted President Obama’s housing proposals, saying they would help accelerate the market’s “strong recovery” and prevent another mortgage crisis.
“We are seeing a strong recovery,” Donovan said on MSNBC’s “Morning Joe.” “The president is going to make sure… that our housing market keeps recovering so that we do see money coming back to the taxpayers.”
Obama is expected to outline his proposals to reform the housing system, including winding down government-backed mortgage giants Fannie Mae and Freddie Mac, in Phoenix, against the backdrop of that city’s rebounding housing market. Fannie and Freddie received a $187 billion taxpayer-funded bailout in 2008.
The Home Affordable Modification Program, which is supposed to help homeowners who are having difficulty, is seeing a large number of people default again. According to a new government report, more than 163,000 of the 600,000 homeowners who have received permanent loan modifications through the Home Affordable Modification Program have ended up defaulting.A total of $815 million in taxpayer funds has been spent on loans that re-defaulted. The taxpayer funding was primarily paid to the banks and loan services in incentives to modify those defaulted mortgages. Experts believe the modifications apparently were not significant enough to help borrowers stay in their homes for the long haul.