WASHINGTON — Staffers for Senate Banking Committee Chairman Chris Dodd were working Monday to schedule a meeting with top regulators to urge them to speed up implementation of a foreclosure prevention program included in the recently passed housing bill.
After the Senate voted 72 to 13 on Saturday to approve the bill, the Connecticut Democrat jumped on comments in American Banker from a Department of Housing and Urban Development official saying the anti-foreclosure program was unlikely to become operational when it takes effect in October.
"I want … the oversight board that is responsible for this … in my office on Tuesday to tell me why we can't begin immediately to get this bill working and to get the rules in place so we can begin making a difference," Sen. Dodd said at a press conference.
The bill included several elements, but Sen. Dodd said he is particularly concerned about any delay in a program that would let the Federal Housing Administration insure underwater mortgages after lenders and servicers agree to write down the principal. The program is expected to help 400,000 borrowers.
The heads of HUD, the Treasury Department, Federal Reserve Board, and Federal Deposit Insurance Corp. are required to write regulations that would carry out the FHA refinancing program. American Banker reported Friday night that a HUD representative said even a proposed regulation probably would not emerge until early next year and would then probably go through the usual comment and review process, which can take several months.
Sen. Dodd said that there is no excuse for such a response when foreclosures are continuing to pile up and regulators have known for months that this measure was on its way. "We wrote this legislation specifically to bypass the normal rulemaking process. We began this process really … as early as January and we introduced a bill last spring. The idea that HUD is just sort of getting together to think about possibly a year before we can offer any relief for homeowners is totally unacceptable," he said.
"I'm not going to tolerate a slow walk on something that is so important to the American consumers when they may or may not be able to keep their homes."
It was unclear by press time whether Sen. Dodd's meeting with the regulators would take place today.