October 19, 2011
Dear Mr. Rudow,
Because I share your deep concern and frustration about the foreclosure crisis which is devastating families and communities across our country, I want to update you on some of my recent work.
On October 12, 2011, I joined my colleagues in the California Democratic Delegation to introduce a plan for effectively addressing the foreclosure crisis. We detailed the plan in a letter to President Obama, a copy of which is attached for your review.
Like millions of Americans, I'm extremely frustrated that more progress has not been made to address this crisis. Much of the problem was not caused by irresponsible borrowing, but by the risky financial speculation that inflated prices and disguised bad debt as safe. Now, as millions of people find their homes underwater and their monthly payments increasingly unaffordable, the Administration has done very little to come to their aid.
In a recent meeting with the Director of the Federal Housing Finance Agency, I asked the Director if he had ever met with a family facing foreclosure. He answered that he hadn't. This sends a deeply troubling message, and I hope the Administration will act promptly on our proposals, which include:
o Directing the Federal Housing Finance Agency, the conservator of Fannie Mae and Freddie Mac, to establish a plan to refinance all mortgages they own or guarantee;
o Establishing a principal reduction plan that would allow a restructuring in Chapter 13 bankruptcy for underwater mortgages; and
o Instituting a "Homeowner's Bill Of Rights" to stem some of the most flagrant servicer abuses once and for all.
These actions can each be accomplished swiftly through administrative action and without new legislation which would be difficult to pass in a divided political environment. Our plan would have a meaningful impact on millions of borrowers and their communities, in contrast to previous Treasury initiatives that have helped a comparatively small number of homeowners. The only thing missing is the political will to act, and I intend to continue pressing for it.
A number of useful pieces of legislation have been introduced that also would help to relieve this crisis, but while Democrats and Republicans may agree on the scale of the problem, we so far have not been able to agree on solutions. The impact of the crisis is being felt not just by individual borrowers, but by families devastated at the loss of a home, communities impacted by declining tax revenue, and an industry devastated by loss of stability. I will continue to fight for homeowners to bring this crisis to an end as quickly as possible.
If you have any other questions or comments, let me hear from you. I value what my constituents say to me, and always need your thoughts and benefit from your ideas.
I've created an ongoing e-newsletter to keep constituents informed on a variety of congressional issues and legislation. Many constituents tell me how much they value reading it, and if you would like to as well, you can go to my website at http://eshoo.house.gov and click on Sign Up for ENews. Your email address will never be used by anyone except my office to communicate with you, and your tax dollars will be conserved by using electronic communications rather than traditional mailings.
Sincerely, Anna G. Eshoo
Member of Congress