UPDATE:US HUD Secretary To Push Changes To Mtge Credit System
By Jessica Holzer Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- U.S. Department Of Housing and Urban Development Secretary Shaun Donovan vowed to work to ensure that poorer borrowers can still obtain credit to buy homes without getting saddled with mortgages they can't afford.
Speaking before an audience of affordable-housing advocates, Donovan indicated that revamping the mortgage credit system would be a top priority of his agency after the housing market is stabilized.
"We need to make sure we create a fair, transparent open system of credit for all Americans," he said Thursday at a conference in Washington hosted by the National Community Reinvestment Coalition.
Donovan said he would draw on his experience as New York City housing commissioner to overhaul how mortgage credit is delivered to low- and moderate-income borrowers. He suggested the experience provided a model for how to do so, while minimizing foreclosures.
"We know that this can work," Donovan said. "We need to help implement that at the federal level."
The remarks were some of the first yet to signal Donovan's agenda as head of HUD. Democrats have said they want to lift HUD's stature, boosting housing policy to the level of other domestic priorities. The department is playing a big role in carrying out the Obama administration's strategy for stabilizing the housing market.
"We want to make sure that in this administration, HUD has a seat at the grown-up table. We've been at the kid's table too long," Donovan said, adding, "That is becoming a reality."
Mortgage credit has all but dried up for low- and moderate-income borrowers since the collapse of the subprime market in 2007. Not everyone agrees it should be made widely available to such borrowers again. Donovan's remarks Thursday set him apart from many in his own party who believe poorer families would be better served by dramatically boosting funding for affordable rental housing.
Donovan did not give details on how he would revamp mortgage credit, saying only that there was "the need for responsibility in our financial system."
Donovan discussed the administration's plan to right the housing market, which aims to help up to nine million homeowners avoid foreclosure. The two-pronged strategy centers on making it easier for underwater homeowners to refinance into more affordable mortgages and providing incentives to mortgage servicers to modify troubled loans.
Donovan said the administration was also working on a proposal aimed at reducing the principal balance of mortgage loans for certain borrowers. "We're trying to do a variety of things that will work." he said.
-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; jessica.holzer@dowjones.com
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Publié le 12 mars 2009 Copyright © 2009 Dowjones
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