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Statement from ACORN Financial Justice Center Director Austin King on the need to use Geithner's Public-Private asset purchase plan to stem the foreclosure crisis:
"The best and fastest way to provide for a correct valuation of the so-called toxic assets that have frozen the secondary mortgage market is to put a stop to the record pace of foreclosures, which will allow home prices to stabilize and mortgage-backed assets to be fairly valued. A major step in this direction is President Obama's "Making Home Affordable", a comprehensive plan to prevent unnecessary foreclosures by facilitating loan modifications to affordable terms. In light of the Administration's commitment to foreclosure prevention, the "Legacy Securities" purchase plan announced by Treasury today could be of further assistance in preventing foreclosures if each new FDIC-backed Public-Private Investment Fund (PPIF) is prohibited from using a mortgage servicing company that has refused to sign a contract with Treasury to use economically rational foreclosure-prevention protocols. Further, no public dollars should be spent on purchasing mortgage-backed assets unless those assets are whole mortgages or assets which come with complete authority to modify the underlying mortgages. Too many foreclosures are still happening because of a lack of clarity over which parties are authorized to modify the terms of a mortgage, even when such a modification would be less costly to investors than a foreclosure. The federal government, given its proposed exposure in this public-private purchase plan, must have final decision-making authority over whether to modify or foreclose on mortgages. ACORN looks forward to these details being clarified as we learn more about the plan."
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ACORN is the nation's largest community organization of low- and moderate-income families, with over 450,000 member families organized into neighborhood chapters in 100 cities across the country. Since 1970 ACORN has taken action and won victories on issues of concern to our members. Our priorities include: better housing for first time homebuyers and tenants, living wages for low-wage workers, more investment in our communities from banks and governments, and better public schools. ACORN is an acronym, and each letter should be capitalized. ACORN stands for the Association of Community Organizations for Reform Now.
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