Thursday, May 3, 2012 | 6:29 p.m.
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.”