Statement From New York Bank Superintendent And Tarp Oversight Panel Member Richard H. Neiman
October 22, 2009
New York, N.Y.: “At today's Congressional Oversight Panel hearing with Assistant Treasury Secretary Allison, he acknowledged that while progress has been made in bringing more borrowers at-risk of foreclosure into the Administration’s Home Affordable Mortgage Program (HAMP), the measure of success can not be measured only by the number of borrowers who enter the process. The real test is the number of families who complete the trial modification period and receive sustainable permanent modifications.”
“We’ve seen very low conversion rates from trial to permanent modifications to date, due to delays in program implementation. But, with millions of homeowners and public dollars on the line, the Panel held Treasury accountable for sharing their projections on the program’s ultimate success rate. Assistant Secretary Allison stated that historic experience suggests that typically only half of the modifications become permanent. The Administration’s program is unique, however, in providing for much more substantial reductions in monthly payments, which Treasury is hopeful will lead to a conversion rate as high as 75%.”
“Treasury expects hard data based on actual conversion rates early next year, and the Panel will continue to ask difficult questions on the sustainability of those modifications, as well as the overall impact of the program. Even if HAMP is able to achieve a high success rate, there will still be millions of families at-risk who are not eligible to participate. That’s why I have been calling on Treasury to develop other programs to expand the range of assistance, particularly to help those recently unemployed in this recession. I highlighted this issue in our hearing today, and look forward to receiving a follow-up report from Assistant Secretary Allison.”
“We need to help as many families as possible and to stabilize communities, and we need to think creatively. At last month’s Panel’s hearing on foreclosures, we heard very positive feedback on Pennsylvania’s Homeowners Emergency Mortgage Assistance Program (HEMAP), a state program that offers bridge funding to borrowers facing a temporary hardship. And here at home in New York, we have revised the foreclosure process to include mediation sessions in court. Solutions like these that have been proven to work at the local level should be expanded nationwide.”
The New York State Banking Department is the regulator for all state-chartered banking institutions, virtually all of the United States offices of international banking institutions, all of the State’s mortgage brokers, mortgage bankers, check cashers, money transmitters and budget planners. The aggregate assets of the depository institutions supervised by the Banking Department are more than $2.4 trillion.In addition to regulating banking institutions, the Banking Department is active in informing and educating all New Yorkers on banking matters. To contact the Banking Department, please call 1-877-BANK-NYS or visit our Web site at www.dfs.ny.gov.