Hearing of the Senate Committee on Banking, Housing and Urban Affairs - Homeowner Affordability and Stability Plan

Hearing of the Senate Committee on Banking, Housing and Urban Affairs - Homeowner Affordability and Stability Plan

Sen. Bennet, Banking Committee Examine Administration's Housing Rescue Plan

Today, the Senate Committee on Banking, Housing and Urban Affairs heard testimony from Shaun Donovan, Secretary of the U.S. Department of Housing and Urban Development, on the Obama Administration's plan to protect struggling homeowners and get the housing market back on track.

At the hearing, Secretary Donovan outlined the framework for the Administration's housing rescue effort, the Homeowner Affordability and Stability Plan, which is designed to prevent further declines in the housing market and keep seven to nine million struggling families across the nation from losing their homes to foreclosure.

In his remarks, United States Senator Michael Bennet discussed the scope and severity of the housing crisis in Colorado - which ranks fifth nationwide in home foreclosure rates - but also highlighted recent housing gains as a sign of Colorado's leadership on the issue. In particular, Senator Bennet lauded the efforts of the Colorado Foreclosure Hotline - which has helped keep over 4,000 families from losing their homes - and encouraged Secretary Donovan to explore this and other innovative steps Colorado has taken to tackle the housing crisis on a larger, national scale.

Senator Bennet's opening remarks, as prepared for delivery, are included below:

"Thank you Mr. Chairman. We're grateful for your insight about the President's ambitious plan to protect homeowners and get the housing market back on track.

"As several of my colleagues have pointed out, when a house goes into foreclosure, it impacts not just the family that loses their home, but neighbors and whole communities. Foreclosures are not just an economic issue, they are a moral issue. When a family is forced out of their home, children often switch schools and miss critical instruction. As former Superintendent, I saw the impact on schools of high transiency rates. Some studies have shown that reducing transiency would result in closing the achievement gap.

"Colorado has been particularly hard hit by the housing crisis and currently ranks 5th in the nation for foreclosure rates. However, believe it or not, 5th in foreclosures is actually an improvement over the dire situation we faced only a few months ago. In Colorado, our foreclosure rates actually fell slightly in the last year.

"This is in part because we got innovative and tried the nation's first statewide foreclosure prevention hotline. The hotline is a collaborative effort between government, the private sector, and non-profits to keep people in their homes. Launched in 2006, the hotline has prevented an estimated 4200 foreclosures. Despite distressing circumstances in their lives, 4 out of 5 callers manage to avoid foreclosure. In Colorado we have learned that early intervention is critical to keeping families in their homes. Don't get me wrong - we still have far too many families struggling to pay their mortgages in Colorado and the hotline is seeing an increase in calls. But I am encouraged that some of the steps we are taking in Colorado are worth exploring on a larger scale.

"That's why I was happy to see the counseling and education components of the President's Homeowner Affordability and Stability Plan. As you move forward with these plans to assist homeowners, I encourage you to look at Colorado as a state that has had some success.

"Mr. Secretary, the President's plan lays out clear strategies for keeping homeowners in their homes. However, homeowners are not the only ones being impacted by the economic crisis. Renters are also losing jobs, pensions and health care. There was a shortage of affordable rental units before the economy began to deteriorate. Now, demand for rental units has grown..."

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