Housing and Urban Development Secretary Shaun Donovan defended President Barack Obama’s $75 billion foreclosure program by responding to critics who aver that the program is using the money of responsible taxpayers to support irresponsible borrowers, losers and speculators. There are some people saying that the foreclosure program is unfair to Americans whose assets became tax foreclosure properties due to the economic downturn but were not helped.
Donovan insisted that the administration’s foreclosure program will help only responsible borrowers who had financial difficulties generally because of factors outside their control. Former owners of tax foreclosure properties are probably wishing they had such help when they were affected by factors outside their control.
Obama’s $75 billion program was announced to help about 9 million troubled homeowners, but critics condemned the program. They said the administration’s program will help irresponsible individuals while ignoring the needs of borrowers faithfully paying their mortgage loans. Others point to the reality of tax foreclosure properties whose former owners were not helped by the federal government.
White House spokesperson Robert Gibbs admitted that there could be irresponsible borrowers who will pass through the screening process and get assistance from the administration’s foreclosure program. But Donovan asserted that there will be checks to make sure only deserving Americans receive aid from the program. He says the program will make sure accepted borrowers are those applicants able to keep up with monthly payments so that their homes will not follow the fate of tax foreclosure properties.
Obama’s foreclosure program has been called a horrible idea by South Carolina Governor Mark Sanford. He said around 95 percent are keeping up with their monthly payments even if they are struggling with their finances. He questioned the effort of helping reckless borrowers by using the taxes paid by responsible citizens. Basically he is questioning the idea of helping irresponsible homeowners who lost their homes to lender foreclosures while failing to help previous owners of tax foreclosure properties.
Sanford was also particularly concerned about a provision in the foreclosure program that would empower bankruptcy judges to reduce bankrupt borrowers’ remaining principal balances. He says that this provision is a dangerous precedent in the country’s justice system. Individuals who are former owners of tax foreclosure properties would probably affirm Sanford’s line of thinking because the courts did not help them save their properties.
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