[Congressional Record Volume 157, Number 19 (Tuesday, February 8, 2011)]
[Extensions of Remarks]
[Page E158]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         MORTGAGE FORECLOSURES

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                        HON. DENNIS J. KUCINICH

                                of ohio

                    in the house of representatives

                       Tuesday, February 8, 2011

  Mr. KUCINICH. Mr. Speaker, banks repossessed more than 1 million 
homes and issued nearly 3 million foreclosure notices in 2010. These 
record-breaking numbers defy a massive effort over the last two years 
by the Obama Administration to prevent foreclosures. Nearly $12 billion 
dollars has been spent on a system to incentivize banks into lowering 
the monthly payments of troubled borrowers. But the program hasn't made 
a serious dent, and here's why: banks make more money on foreclosure 
than they do on mortgage loan modification.
  Banks who give mortgages to homeowners also own many of the 
companies, known as servicers, which collect the monthly payments by 
borrowers. This seems like a logical arrangement, until you understand 
that servicers make more profit if a homeowner defaults on their 
mortgage and gets foreclosed on, than if the bank gives that struggling 
homeowner a mortgage modification. Yet one in five homeowners owe more 
on their mortgage than their home is even worth.
  This has kept well-intentioned mortgage modification efforts by the 
Obama Administration will not be able to seriously reduce foreclosures 
until the banks are forced to write down the value of mortgages.

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