HUD Secretary Talks About Foreclosure
February 11th, 2009 by 
Joseph Smith
More and more homeowners are becoming victim to the foreclosure crisis. About 10 percent of homeowners fall behind on mortgage and are on the verge of losing their home. They need every help available especially from the government.
The Department of Housing and Urban Development (HUD) plays a key role in efforts to strengthen the housing industry. In an interview with Gerri Willis of CNN, Shaun Donovan, secretary of HUD, he revealed the following important points:
- One of the first things that have to be prioritized in order to address the worsening foreclosure situation is the creation of a bill that will help generate jobs in the country. The crisis may have started with problems in mortgage, but what really fuelled the housing situation was unemployment.
- Essentially, foreclosure incidents have to be reduced in order to address the housing crisis. Around fifty percent of house sales in the country are foreclosures. The government has already been implementing measures to address this.
- If foreclosures cannot be avoided, impact should be minimized at the least. Affected communities definitely have to be stabilized. Evicted homeowners must be provided access to affordable rental homes in order to minimize the number of homeless people. Incidentally, HUD has already been taking these steps. The Department is currently allocating about $4 billion in funds received last summer for the Neighborhood Stabilization Program.
- Pressure really has to be employed on home prices. This is among the final steps in the recovery of the housing market.
- Bringing down interest rates is not enough in itself. These actions can turn out to be costly. Thus, whatever specific steps are to be taken towards lower interest rates have to be targeted.
- It is equally beneficial to lenders and borrowers to resell a property rather than have it go through foreclosure. In most cases, even, it is a wiser move for a servicer and an investor to employ loan modification and allow homeowners to stay in their home until such time that they recover along with a recovering housing industry.
- The HUD is working on proposals to award incentives and give assistance to mortgage servicers which are willing to provide loan modification options to their borrowers.
