Statement of Michael Calhoun, President

re Financial Services Committee Chairman Frank’s Housing Proposal

March 13, 2008

The housing, economic, and mortgage rescue proposal from House Financial Services Committee Chairman Barney Frank is extremely helpful and the Center for Responsible Lending commends him for taking a lead on this issue.  His plan recognizes much more help is needed for victims of the subprime mess than is now available. While we welcome any and all plans that help even one more family keep a home, the Treasury Department's "Project Lifeline" has been largely inadequate. Treasury's reliance on voluntary efforts by lenders to help distressed homeowners has simply proved unworkable on a large scale. 

The essential structure of Chairman Frank's plan would be a sound and fair way to provide help to distressed borrowers. We look forward to working with the Chairman, other members of Congress, and stakeholders to hammer out key aspects of the plan, such as how to create a way for the FHA to buy loans in bulk.

Another strength of Chairman Frank's proposal is that it would work alongside other needed plans. These include a measure now before Congress that would allow courts to modify mortgages so 600,000 families facing foreclosure could stay in their homes. Giving courts this ability is crucial to surmounting the threat of investor lawsuits and other roadblocks that will continue to hobble industry's voluntary effort.