Secretary Timothy Geithner said the Obama administration is working on a plan to make it easier for Americans to refinance underwater mortgages and to turn REOs into rentals. The secretary said it's likely the administration will move on this plan within the next few weeks.
Geithner made that assertion when quizzed by members of the House Financial Services Committee Thursday.
"We expect to move forward in the next couple of weeks with the Federal Housing Finance Agency
to make it easier for Americans to refinance even if they are somewhat underwater," Geithner told lawmakers. Geithner was short on details, but said some type of large plan to turn REOs into rentals is also on the table.
"We are trying to get this huge amount of vacant property on the market, and in the hands of people who can rent," the Treasury secretary said.
The House Financial Committee's Q&A with Geithner focused on housing at several key points.
One lawmaker pushed Geithner on why the white paper
released by the Treasury on GSE reform in February had yet to make it into some type of final proposal.
Geithner assured lawmakers those discussions are ongoing and that the European debt crisis and other immediate fiscal concerns delayed the rollout of a final GSE reform plan, but assured the committee the Treasury continues to work on those proposals.
Geithner took heat from Democratic Congressman Luis Gutierrez (D-Ill.) who said he voted for the Home Affordable Modification Program, or HAMP, to help more homeowners stay in their properties, but ended up disappointed when only a slice of the $50 billion allocated for HAMP was spent to save distressed homeowners.
Geithner said the administration was prevented from reaching a large segment of distressed borrowers because a large number of underwater mortgages are ineligible for HAMP due to excessive debt levels or the fact they are classified as jumbos or loans on second homes.
"We are still looking for ways to expand the reach of these programs," Geithner said. He told lawmakers the administration wants to propose a plan where Congress would allocate more funds to the Department of Housing and Urban Development
to send resources to communities weighed down by foreclosures.
Write to Kerri Panchuk