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November 24, 2014

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HUD secretary, in visit to valley, touts help for distressed homeowners

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Christopher DeVargas

HUD Secretary Shaun Donovan sits down with the Las Vegas Sun Editorial Board to discuss mortgage servicing settlements for Nevada homeowners, Thursday May 3, 2012.

HUD Secretary Shaun Donovan

HUD Secretary Shaun Donovan sits down with the Las Vegas Sun Editorial Board to discuss mortgage servicing settlements for Nevada homeowners, Thursday May 3, 2012. Launch slideshow »

U.S. Housing and Urban Development Secretary Shaun Donovan has a message for struggling homeowners in Nevada: Help is available.

Nearly three months after the announcement of a “landmark” multibillion-dollar settlement aimed at holding banks financially accountable for their role in the housing crisis, Donovan on Thursday visited Las Vegas, where he took part in several events to tout services available to homeowners facing foreclosure or who find themselves underwater on their mortgages.

“It’s the most significant effort … to hold these institutions accountable for the behavior that led to the crisis,” Donovan said of the February Mortgage Servicing Settlement, which has been valued around $25 billion. “We structured (the settlement) in a way to get immediate help to homeowners, to keep them in their homes and more broadly to help lift housing markets that have been hardest hit.”

The settlement, which includes the country’s five largest loan servicers, including Bank of America, Wells Fargo and JPMorgan Chase, will return about $1.5 billion to Nevada to help homeowners with principle reduction, loan modifications and refinancing at low-interest rates.

Some have criticized the deal as not going far enough in holding banks financially accountable and providing too little assistance for homeowners.

Donovan described the settlement as another step in repairing the country’s housing market and said new legislation on its way to Congress later this year would further help homeowners.

The legislative package would include two to three bills, Donovan said, and institute reforms like universal refinancing of mortgages and a program that covers closing costs for underwater homeowners who refinance under certain conditions.

“There’s very little that can pass Congress this year, (but) this is one of the areas where I think it’s possible,” Donovan said during a meeting with the Las Vegas Sun Editorial Board. “This is not in any way about politics. This is about the real potential to make a difference on these issues, this year. We think it has a real chance.”

Donovan spent the morning with Nevada Attorney General Catherine Cortez Masto and other local leaders and housing advocates at a roundtable discussion of the new tools available to help distressed homeowners. He also made the rounds to other media outlets to spread his message.

The housing market is on in the midst of a sustainable recovery, Donovan said, but it will still take at least another year or two before a full return to normal. He said the housing recovery still could be threatened, especially if those advocating the elimination of federally backed lenders Fannie Mae and Freddie Mac are successful in their quest.

In the meantime, resources are available for distressed homeowners that can help them keep their houses, he said. Part of the mortgage settlement money destined for Nevada will be used to provide free legal services and counseling to distressed homeowners, as well as establish a consumer protection division, Donovan said.

“This is not something you’re going to turn around overnight, it’s too deep a hole,” he said. “There is help available, and it’s free help…(People) should not be terrified of picking up the phone. They can call the Hope Hotline (888-995-HOPE). They can go to nationalmortgagesettlement.com and get real help.”

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  1. "The settlement . . . will return about $1.5 billion to Nevada to help homeowners with principle [sic] reduction, loan modifications and refinancing at low-interest rates."

    Yet as this article clarifies that "return" is neither cash for injured homeowners nor return of their wrongfully-foreclosed homes. Instead partly it's "to provide free legal services and counseling to distressed homeowners, as well as establish a consumer protection division." In other words more government programs and more money in the pockets of lawyers, and the rest goes where? Balance Nevada's budget on the backs of homeless families?

    Donovan is just another cheerleader for do-nothing federal programs giving little more than false hope. And he gets to keep his job.

    "The regulators got bailed out, the middle class lose their jobs and their houses. All this desire to trust in the government to make sure that big corporations won't hurt them actually is a backfire on them." -- Rep. Ron Paul to Jon Stewart 9/26/11, citing the example of the real estate crash as example of government regulation gone bad

  2. As a former HUD employee, I am an advocate of closing the agency. Over the years there were even HUD funded studies suggesting that many of the programs were worthless. Spare us all and close now and send the secretary back to the northeast.