Monday, April 27, 2009

Washington, D.C. – Congresswoman Dina Titus of Nevada’s Third District sent a letter to Treasury Secretary Timothy Geithner today urging him to use TARP funds to create programs to help homeowners who owe more than 105 percent on their home.

Below is the text of the letter:

April 27, 2009

The Honorable Timothy Geithner
Secretary - Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Geithner,

With all due respect, I would like to address a specific answer that you gave during your recent testimony before the Troubled Asset Relief Program (TARP) Congressional Oversight Panel. I appreciate the efforts that the Treasury Department has made to increase transparency of the TARP program and I encourage you to continue to release information about the results of the program. I am also pleased that you indicated funds that had been loaned could be returned to the Treasury soon. I look forward to you reporting that all of these loans have been repaid to the government. 

I am seriously concerned, however, about one specific response you gave to a question from Chairwoman Elizabeth Warren. You were asked about assistance programs for families whose mortgage value is more than 105% of the current value of their home. You indicated that you were hopeful that changes to the “Hope for Homeowners” program and new programs that have recently been created would help these families. You also said that these programs “are not designed to solve all problems” and were developed to help people who “were responsible in debt they took on.” Your brief answer to this question did not sufficiently address this important issue. I am worried that you see this problem as minor and that enough has been done to help homeowners with negative equity in their homes.

As you know, my district in Southern Nevada has been severely affected by the current housing crisis. It is estimated that there were be 72,000 foreclosures in Nevada this year. In the third quarter of 2008, more than 60,000 families were two or more payments behind on their mortgage, compared with fewer than 8,000 in the third quarter of 2004. And it is estimated that nearly 60 percent of homes in Las Vegas are in negative equity.

Most families were “responsible in debt they took on” but have seen the value of their house plummet as their income simultaneously abruptly decreased.  This crisis set in suddenly, as gaming and construction projects laid off employees and housing prices crashed. Families were not able to insulate themselves from the economic downturn.

I write to ask you to consider using TARP funds, especially those that will be soon returned to the Treasury, to create new, targeted programs to help those families that are more than 105% “underwater.” Many families in my district are not eligible for help under the “Making Home Affordable” program but need assistance to stay in their homes. I believe that keeping families in their homes will play a major role in stabilizing and eventually ending the housing crisis, both in Southern Nevada and throughout the country.  In addition, I ask you to work with your fellow Cabinet members to increase the scope of current assistance programs for homeowners or create new programs to help families facing the possibility of losing their homes.

Thank you for your time and consideration.

Sincerely,

Dina Titus
Member of Congress

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Tags: housing, TARP