Federal housing chief Shaun Donovan admitted that the Homeowner Bill of Rights is an essential step in the recovery of the housing market. Donovan expressed the need as he toured South Los Angeles neighborhoods ravaged by the housing bust.
California is expected to receive the largest chunk of a historic $25-billion mortgage settlement reached this year with the nation’s five biggest banks. But Donovan said that in order to make reforms reached in that agreement permanent, state legislators must pass a series of bills backed by California Atty. Gen. Kamala D. Harris, who negotiated on behalf of the California.
“We cannot let homeowners suffer in the way that we found in our investigations,” Donovan said Tuesday, speaking at the FAME Assistance Corp., an economic development agency in South Los Angeles. “Because foreclosures and other processes around homeownership are directed by state law, it is critical that a Homeowner Bill of Rights move forward.”
The series of bills backed by Harris would restrict practices such as foreclosing on homeowners as they try to negotiate a loan modification and mandate that banks designate a single person to work with troubled borrowers. Opposing the bills are mortgage bankers and the general business community, The Times has reported. Similar efforts in the past have failed.
Earlier in the day, Donovan, secretary of the U.S. Department of Housing and Urban Development, toured the Broadway-Manchester neighborhood of South Los Angeles with Rep. Maxine Waters (D-Los Angeles), including a stop at a home that had been revitalized by the city using federal money.
While touring the home, Donovan told Waters that in areas targeted by the federal program the number of vacant homes is declining and, in a majority of neighborhoods, home prices are rebounding.
“It’s not just the jobs,” he said. “It really has begun to turn the market around.”