WASHINGTON — A national network of faith-based organizations, ministers, homeowners and community organizers met with Treasury Secretary Timothy Geithner on Wednesday, urging him to fight fraudulent foreclosures.
People Improving Communities through Organizing, PICO, and other faith-based entities asked the Treasury Department to hold banks accountable to the guidelines enacted through the Home Affordable Modification Program.
“We sent a letter in January outlining how we thought Bank of America was violating HAMP,” said Tim Lilienthal, communications coordinator at PICO.
HAMP, which was enacted in April of 2009, is a plan to make monthly mortgage payments more affordable for homeowners. Under the plan, owners have the option to modify or refinance mortgages. The program could provide relief for two to three million families on the verge of foreclosure.
“Only one half of the families have been given relief,” said Rev. Tommy Pierce, a board affiliate with the National People’s Action.
Pierce said there are 76,000 families that have had temporary loan modifications in which they have been consistently paying. But after the six month temporary period ends, many families are back in the foreclosure process. PICO wants permanent loan modifications for these families.
The organizations advocated that banks not complying with the terms of HAMP should be fined. They also asked for incentive payments to be clawed back.
“Our goal is to keep families in their homes,” said Ken Kelly, a community organizer at PICO. “We think there is authority under HAMP.”
Treasury officials were sympathetic to the issues, but also stressed that the department is not able to enforce any penalties.
“We’re saying that they are responsible,” said Kelly.
Jennifer Murphy, director of lender service relations for the Center of New York City Neighborhoods said Geithner heard the message, but she was not hopeful that any changes would come from the meeting.
“They expressed that there is nothing more that they can do to compel the banks,” said Murphy. “I would hope they would look harder to see if there is some way. The American people saved the banks. Now it’s time for the banks to save the American people.”
Still the department says that they will continue to work with PICO and other organizations on the issue.
“We truly appreciate the work that the faith-based community and grass roots counselors and advocates do on a day-to-day basis to help struggling homeowners in need,” said Mark Paustenbach, a representative for the department.
The groups also asked for a moratorium on foreclosures specifically for those who are already eligible or already enrolled in HAMP.
“We advocate for a temporary, very targeted, moratorium in foreclosures to send a clear message to the American public that the Treasury does care about due process,” said Kelly. “It would also send a clear message to the market that the administration wants to get to the root of the problem which includes faulty documentation. “
Advocates present at the meeting said that it is clear the administration does not support a moratorium.
PICO is scheduled to meet again with Geithner to discuss the proposed methods outlined in its January letter within 30 days.