MEDIA ADVISORY

WHAT: News Conference & Presentation

WHO: Iowans For Accountability (IFA) - 2010 Scott County Supervisors Candidates: John Riley, John Green, Jesse Anderson

plus IFA Central Committee Members

WHERE: Davenport Public Library - Main Downtown Branch - Basement Film Room

WHEN: Tuesday Oct 19, 2010 at  3:00 p.m.

WHY: Announce Results of IFA Research & Subsequent Recommendations Regarding County Budget, Spending, SECC911, Taxes, Board Activities and More

WASHINGTON, D.C. - Senator Tom Harkin (D-IA) joined five senators today in sending a letter to the Administration urging agencies to use their authority to address the burgeoning crisis in foreclosure processing.  In recent weeks, there have been widespread news reports of improper and inaccurate review of foreclosure documents and disregard for required procedure, which has led to the suspension of an estimated 200,000 foreclosure proceedings nationwide.  Last Friday, Senator Harkin sent a letter to Iowa's leading mortgage servicers supporting Attorney General Tom Miller's request that they stop processing foreclosures in Iowa until a systemic review of procedure can be conducted.

"The emerging details of the abusive and fraudulent practices of some mortgage servicers hurt not just American consumers trying to make ends meet, but also those buying foreclosed homes and the housing marketplace," Harkin said. "In the interest of American families, I encourage the Administration and regulators to use their authority to isolate the bad actors and stamp out these abuses, not just to restore balance to the marketplace, but to prevent widespread damage to the economy as a whole."

The full text of the letter the senators sent to the Administration follows.  

October 14, 2010

The Honorable Timothy Geithner
Secretary
United States Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C.  20220

The Honorable Shaun Donovan
Secretary
United States Department of Housing and Urban Development
451 7th Street, S.W.
Washington, D.C.  20410

The Honorable Benjamin S. Bernanke
Chairman
Board of Governors of the Federal Reserve
Washington, D.C.  20551

The Honorable Jon Leibowitz
Chairman
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C.  20580

Mr. John Walsh
Acting Comptroller of the Currency
Administrator of National Banks
Washington, D.C.  20219

Mr. Edward DeMarco
Acting Director
Federal Housing Finance Administration
1700 G Street, N.W., 4th Floor
Washington, D.C.  20552

Dear Secretary Geithner, Secretary Donovan, Chairman Bernanke, Chairman Leibowitz, Mr. Walsh, and Mr. DeMarco:

You are no doubt aware of the recently reported improprieties in the foreclosure processes employed by some of our nation's largest mortgage servicers.  Unfortunately, these reports are consistent with complaints that we have heard from our constituents alleging behavior on the part of servicers and foreclosure law firms, popularly referred to as "foreclosure mills," that would constitute bad faith at best, outright abuse at worst.  All of these practices raise serious questions about the integrity of mortgage servicers' loss mitigation and foreclosure processes, from their modification procedures to their foreclosure pleadings.

There have been attempts to dismiss the reported violations as minor technical paperwork errors, and to employ the defense that these were harmless errors because the homeowners were in foreclosure and would have lost their houses anyway.  These are not technicalities, they are not isolated cases - it is likely that over 200,000 foreclosures have now been suspended - and these improprieties cast doubt on the foreclosures in question.  

Rather than a few rogue employees disregarding company policy, the policies themselves were flawed, indicating that there is a systemic problem with the manner in which loss mitigation and foreclosure operations are being conducted by most, if not all, mortgage servicers.  This pattern of behavior has undermined the integrity of the housing market, creating uncertainty for home sales and the availability of title insurance.  

The systemic problems that are being uncovered in the current mortgage market are remarkably similar to the predatory practices employed during the subprime mortgage crisis.  These difficulties stem from the fact that servicers lack the proper incentives to follow basic procedures required either by mortgage contracts, pooling and servicing agreements, or state and federal laws.  Homeowners have no leverage in the modification process and federal agencies (including the Treasury Department) have yet to impose meaningful penalties.  It is time for the government to restore some sanity and oversight to the housing market.  Your agencies are in a unique position to address this problem because your agencies have various authorities over practices at bank and non-bank mortgage servicers.

First, you have the authority to require loss mitigation prior to foreclosure to eligible homeowners facing hardship, where consistent with investor interests, subject to penalty.  Such a requirement would focus servicers' efforts to assist homeowners.  It would also establish clear repercussions for servicers who fail to participate in loss mitigation in good faith.

Second, your agencies have the ability to impose your own tailored moratoriums on foreclosures for certain identified lenders, pending assurances that such lender's paperwork complies with state and federal requirements; proper ownership documentation is in order; and all contracts and loss mitigation requirements under those contracts have been followed.  The banks are focusing solely on their affidavit processes, but a more comprehensive review is required.  Failures to comply with all of these requirements should be penalized.

Finally, your agencies have the authority to review and reform the financial incentives for servicers and foreclosure mills.  Mortgage servicers have been accused of imposing unfair fee arrangements in modification contracts and foreclosure pleadings, and foreclosure mills are paid on a per-case fee basis.  These arrangements benefit the mortgage companies to the detriment of homeowners.

Congress has a role to play in addressing this crisis as well.  But your agencies have tools at your disposal to address the substantial challenges facing homeowners in the mortgage market, and you are able to respond more nimbly than Congress to this emerging crisis.  The ample record of homeowner abuse should compel you to act expeditiously in the best interest of homeowners and investors.

Thank you for considering our views.  We await your response to the ongoing developments of the foreclosure crisis.

Sincerely,

Senator Tom Harkin
Senator Sherrod Brown
Senator Barbara Boxer
Senator Mark Begich
Senator Debbie Stabenow
Senator Jeff Merkeley

Cc: Mr. Timothy Massad, Chief Counsel, Office of Financial Stability, United States Department of the Treasury
Mr. David Stevens, Commissioner, Federal Housing Administration

Hope Manor Apartments to Provide Job Training, Support Services

CHICAGO - October 14, 2010. Governor Pat Quinn today announced a $4 million state investment to help build a housing development that will provide quality, affordable apartments and supportive services for 80 Veterans who are homeless. Approximately 75 jobs will be created during the construction of Hope Manor Apartments in Chicago.

"Our Veterans deserve to have a place to call home after sacrificing so much for our nation," said Governor Quinn. "The Hope Manor Apartments will provide safe homes for our Veterans and ensure that they receive the skills and support necessary to find stability."

Hope Manor will provide supportive housing for up to 80 Veterans who are homeless. The four-story building on Chicago's West Side will include 30 studio apartments, and 10 two-bedroom and 10 three-bedroom suites. Employment readiness classes, job training and coaching, computer training, a business resource center, a health and wellness clinic, recovery resources, individual counseling and case management will be available on the first floor of the development. Construction is expected to be completed in November 2011.

The Illinois Housing Development Authority (IHDA), the state's housing agency, invested approximately $4 million in federal Low-Income Housing Tax Credits, federal American Recovery and Reinvestment Act (ARRA) funding and Illinois Affordable Housing Tax Credits to build the development. The federal tax credits will generate an additional $8.8 million in private equity for construction of the building.

"Hope Manor Apartments demonstrates how important supportive housing is to end homelessness," said IHDA Executive Director Gloria L. Materre. "By investing in this development, we are getting our Veterans off the streets and giving them hope."

Developed by the Volunteers of America of Illinois, the Hope Manor Apartments will also be financed with a $1 million U.S. Department of Veterans Affairs grant, and a $174,000 Illinois Department of Commerce and Economic Opportunity grant. The City of Chicago donated the property to build Hope Manor, which will include a "green" roof and other environmentally-friendly features.

"Many Veterans continue to need facilities that provide supportive housing and services that allow them the opportunity to reach their fullest potential," said Illinois Department of Veterans' Affairs Director Dan Grant. "We salute and congratulate Volunteers of America for helping to fill this need with Hope Manor Apartments."

Hope Manor Apartments is the latest Illinois development to break ground as a result of federal housing stimulus dollars created by ARRA. To date, ARRA has provided a jumpstart to construction of 2,646 affordable rental homes, creating more than 3,000 jobs across Illinois.

Veterans represent up to 15 percent of America's homeless population. According to the U.S. Department of Veterans Affairs, more than 100,000 Veterans are homeless any given night.

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DES MOINES, Iowa, Oct. 14, 2010 - Agriculture Secretary Tom Vilsack today announced that USDA Rural Development is providing loans and grants for 433 renewable energy and energy efficiency projects in Iowa under the Rural Energy for America Program (REAP). The funding includes support for wind projects that will generate renewable energy for businesses and agricultural producers. Also selected for funding are an anaerobic digester and renewable energy projects that use biomass as a fuel source.

"These loans and grants will generate and save energy for Iowa's farmers and business for many years to come, while promoting Obama Administration efforts to transition to a renewable energy economy," Vilsack said. "Farmers have significant opportunity to reduce their energy consumption or generate income by producing renewable energy that can be used by other consumers through USDA's REAP program."

The funding totals nearly $32 million and is expected to generate significant cost savings for recipients as they replace outdated equipment and install systems that create renewable energy or reduce energy use.

For example, Mark Anderson of rural Black Hawk County has been selected to receive a $20,000 grant to install a 20 kilowatt wind turbine to provide energy for the farming operation. Dean A. Tjaden of Charles City has been selected for an $8,000 grant to install a biomass furnace. The Madison County Winery LLC, located just outside St. Charles, has been selected for a $13,651 grant to purchase and install a geothermal heating and cooling system and solar panel for the winery's warehouse. Mark Ehrhardt of Monona has been selected for two REAP grants totaling $22,675 to install a biomass furnace to replace a propane furnace to heat a dairy barn and to install robotic milking equipment to reduce energy consumption.

Hundreds of rural businesses and farmers in Iowa have benefited from the REAP program during the past few years. One previous recipient is a farm engine and equipment repair shop in Spencer, Iowa. Shop owner Gary Hoefling moved his businesses from two locations to a new, 6,750-square-foot, energy-efficient building in fall 2008. The new building has a geothermal heating and cooling system that was paid in part by a $27,250 energy grant from USDA Rural Development. The building also uses energy-efficient lighting and is landscaped using environmentally friendly techniques, including a rain garden, permeable pavers and a garden of native prairie grasses and wild flowers that provide coverage and insulation for the geothermal well sites. Hoefling estimates the geothermal system will pay for itself in four to five years because of lower heating and cooling costs, tax credits and an accelerated depreciation schedule.

REAP funding can be used for renewable energy systems, energy efficiency improvements, feasibility studies, energy audits, and renewable energy development assistance. More information on the REAP program, which was authorized under the 2008 Farm Bill, is at: http://www.rurdev.usda.gov/BCP_ReapResEei.html.

Funding of each recipient is contingent upon the recipient meeting the conditions of the grant or loan agreement. The following is a complete list of REAP recipients announced today. Award Recipients

Through its Rural Development mission area, USDA administers and manages more than 40 housing, business and community infrastructure and facility programs through a network of 6,100 employees located in the nation's capital and over 600 state and local offices. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers, and ranchers and improve the quality of life in rural America. Rural Development has an existing portfolio of more than $142 billion in loans and loan guarantees.