The Obama administration says thousands of North Carolina families could benefit from a proposed home-refinancing program. Housing and Urban Development Secretary Shaun Donovan came to Raleigh to tout the proposal. He told WUNC that ten percent of North Carolina homeowners owe more on their home than the home is worth and the national average is twice that.
Shaun Donovan: While North Carolina has survived this crisis better than many places, still for those almost 200,000 families this is an enormous challenge for them. And frankly, with the lowest interest rates in half a century, this is a great opportunity to help those families at no cost to the taxpayer.
The program would allow underwater homeowners to refinance their mortgages with a federally-backed loan. It would be paid for with a fee on large financial institutions. Congress is almost certain to reject that, but Donovan said the mortgage-refinancing program is just one part of the administration's efforts to help struggling homeowners.
Shaun Donovan: We need to permanently reduce the balances of loans for folks that are having a hard time paying. And I've been working very closely with the attorney general here, Roy Cooper, to reach a settlement of all the egregious robosigning abuses. There's about $35 billion of principal reduction that would come through that settlement.
State attorneys general are expected to sign on to that settlement as early as today. It would also require the nation's five largest mortgage lenders, including Charlotte-based Bank of America, to overhaul their mortgage practices. Those include "robo-signing," in which employees used fake signatures or signed off on foreclosure documents they hadn't read.
Isaac-Davy Aronson spoke with Donovan ahead of a Thursday event in Raleigh. Click "Listen Now" to hear the whole interview.
