Ed note: This post originally appeared online at ajc.com.
Recently, housing counselors, advocates and those who work in Georgia’s housing industry traveled to the White House to talk with senior Obama administration officials about what we need to continue rebuilding in the wake of a historic recession.
Already, we’ve made real progress.
With Georgia’s foreclosure rates more than doubling in the two years before we took office, tens of thousands of families saw their home values plummet, their equity wiped out and communities devastated.
But thanks to tools this administration has provided, foreclosures in Georgia dropped by 26 percent in the second half of 2011.
Now, we need to help underwater borrowers. One out of every three homeowners in Georgia owes more on their loan than their home is worth — 540,000 families in all.
When families are underwater, even if they’re paying their bills on time, they can’t take advantage of today’s record-low interest rates. That’s not just holding Georgia’s families back. It’s holding back our economic recovery.
That’s why President Barack Obama announced critical changes last fall to help more families with loans backed by Fannie Mae and Freddie Mac refinance.
Already, thanks to this work, 750,000 families stand to save on average $2,500 per year, the equivalent of a good-sized tax cut.
Similarly, we’ve also been taking steps to make FHA Streamline Refinance available to more borrowers who have Federal Housing Administration loans, allowing families to pay minimum fees to refinance into an FHA-insured loan and helping them reduce their monthly mortgage payments.
And it’s why Obama sent Congress a plan that will give every responsible homeowner in America the chance to refinance at today’s record-low interest rates and save thousands of dollars every year.
But perhaps the biggest step we’ve taken to help families is the historic $25 billion mortgage servicing settlement the Obama administration and a bipartisan coalition of attorneys general from 49 states, including Georgia’s Sam Olens, reached with the nation’s five largest mortgage servicers.
The settlement provides tens of billions in direct relief for families. It forces lenders to reduce the size of exploding, unaffordable loans. It forces lenders to refinance loans for underwater homeowners. And it forces them to pay billions of dollars to hard-hit states such as Georgia.
In all, 67,000 Georgia homeowners, from Atlanta to Athens and Albany to Savannah, will receive as much as $815 million in benefits from the agreement.
Just as importantly, it also provides clear and fairer customer service standards that build upon the new protections introduced when the president announced a Homeowner Bill of Rights, giving people the confidence that lenders and servicers are following a comprehensive list of rights should they ever lose a job or have a medical emergency that puts their home at risk.
As Peach State leaders know better than anyone, all this work is about the same thing: ensuring that families in Georgia and across the country can turn the page on a crisis that left so much destruction in its wake.
It’s about giving hard-working families a fair shot and making sure large financial institutions play by the same set of rules as any other American.
And it’s about building an economy in which hard work pays off and responsibility is rewarded. It’s about an economy built to last.
Ed Jennings Jr. is regional director of the U.S. Department of Housing and Urban Development.