PHILADELPHIA – Governor Jon S Corzine today addressed President-elect Barack Obama, Vice President-elect Joseph Biden, and governors from across the nation on the foreclosure crisis, saying that the quickest path out of the current economic recession lies with keeping families in homes and keeping communities strong, and laying out a five-point plan to make it happen.
“The dream of homeownership has always been a driving force in the American economy, and that dream must remain alive if we are to see a timely economic recovery,” Governor Corzine said. “The housing and foreclosure problem facing families and communities lies at the base of the economic crisis. If the foreclosure problem is not addressed, the economy will not recover.”
During a meeting of the bi-partisan National Governors’ Association with President-elect Obama and Vice President-elect Biden, Governor Corzine was selected by his fellow governors to advocate on behalf of all 50 states and millions of homeowners during what is now widely believed to be the worst housing crisis since the Great Depression. Governor Corzine’s comments kicked off a discussion of the foreclosure crisis among the governors at the meeting.
To prevent a prolonged recession, Governor Corzine said, a federal program needs to be implemented to address the unwinding of bad mortgages – thus keeping homes affordable, and keeping families in their homes.
“We need a housing market recovery program that’s at a scale that only the federal government can provide, otherwise toxic mortgages will poison the system indefinitely,” said Governor Corzine.
Governor Corzine said the elements that need to be addressed include:
Federal regulation of lenders, mortgage brokers, and banks that states currently are barred from regulating by federal law;
Mediators must be made available so that mortgages can be reworked and foreclosures prevented;
Legal assistance, when necessary, must be made available at subsidized rates;
Outreach program needed to de-stigmatize getting help;
Restructuring and modification of the mortgages themselves.
“I know there is pushback from lenders to actually lowering the value of the mortgages,” Governor Corzine said, “but if we don’t find a bottom, if we don’t set a floor, if we don’t find the true value, the housing market will never be appropriately valued, and the financial system will be perpetually filled with overvalued instruments.”
Governor Corzine’s federal proposal mirrors similar action he has taken in New Jersey, including a bill signed into law Monday that allocates $12 million in grant-in-aid funds to provide mortgage mediation and counseling, $500,000 to provide mediation services to homeowners prior to foreclosure proceedings, and $51.4 million in federal funds for the Neighborhood Stabilization Program. The Governor has also proposed providing additional mortgage assistance to homeowners facing foreclosure.
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