U.S. Treasury Secretary Timothy Geithner was on Capital Hill yesterday testifying before the House Financial Services Committee, and during his testimony made several faint mentions of pending housing programs and revisions from the Treasury Department.
“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 said.
Geithner offered no further details, so answers to the considerable questions about the new program were left unanswered. Main inquiries include: whether the new program will be a revision of the Home Affordable Modification Program, or a new program altogether; if the new program will include looser LTV requirements so more homeowners can apply; and if rep and warranty risk will be addressed.
Geithner also vaguely mentioned a possible plan to convert REOs into rentals.
“We are trying to get this huge amount of vacant property on the market, and in the hands of people who can rent,” Geithner said.
Geithner also spent part of the hearing defending HAMP. Democratic Congressman Luis Gutierrez, from Illinois, grilled Geithner on the lackluster performance of the program, saying he was disappointed with how little of the program’s $50 billion budget ultimately went towards helping underwater homeowners.
Geithner said excessive debt levels for homeowners and peculiar mortgages limited HAMP’s effectiveness, but the Treasury continues to investigate new ways to help housing.
“We are still looking for ways to expand the reach of these programs,” Geithner said, who also mentioned a potential remedy that would involve devoting more funds to the Department of Housing and Urban Development specifically towards foreclosed properties.