Donovan Eyes Change to Mortgage Credit System; Bringing HUD to the Forefront
Posted by Matthew Brian Hersh on March 13, 2009
WASHINGTON, DC — HUD chief Shaun Donovan yesterday championed an overhaul of the existing infrastructure of the mortgage finance and economic system in allowing low- and moderate-income individuals to be approved for mortgage loans that remain affordable.
Donovan pointed to an “enormous amount of work to do” in re-tooling the mortgage credit system while touting the specifics of the American Recovery and Reinvestment Act. Donovan spoke to a roomful of housing advocates at the National Community Reinvestment Coalition’s 2009 National Conference.
“We can’t let this crisis stop low- and moderate-income people from getting decent and safe financing,” he said, calling for a “broad range of regulatory reform,” and “the need for responsibility in our financial system.” He said he would draw upon his experience as the New York City housing commissioner before joining the Obama administration.
“Low- and moderate-income people can be successful. we now this can work. We have a blueprint. We need to help implement that at the federal level.”
The HUD chief did not offer specifics on the plan, but his remarks followed those made earlier in the day by House Services Financial Chairman Barney Frank (D-Mass.) as he announced a bill that aims to impose tougher penalties on securitizers who have sold bad loans, along with other restrictions that Frank said would limit the “possibility of incentives to brokers to steer people to higher interest rates.”
Donovan pointed to other areas of the American Recovery and Reinvestment Act that also include funding for increased energy efficiency in existing affordable housing, public housing renovation and retrofit, as well as retrofits and renovations for assisted housing and project-based Section 8 housing.
Donovan also outlined his plan to have HUD be a “partner” for “communities of opportunity”:
“We have to fundamentally reform HUD so it’s not an impediment to the work you do in local communities, but a partnerCatalyzing a market for energy efficient homes, livable, walkable communities, thus reduce transportation and housing costs.”