WASHINGTON – Congress should insist that the Treasury Department invest up to $50 billion into a program to help consumers avoid foreclosures being proposed by the FDIC, Martin Eakes, CEO of Self Help Credit Union and the Center for Responsible Lending told the Senate Banking Committee today.
He said that the money, which would come from the $700 billion troubled assets relief program, was needed because "voluntary efforts by lenders and servicers, while admirable won't fix the problem."
Eakes estimated that the program could reach 3 million households and said that if 2/3 of people could be saved for foreclosure that would be an effective return on the government's investment.
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He also urged lawmakers to lift the ban on judicial loan modifications during bankruptcy proceedings.
Committee Chairman Christopher Dodd (D-Conn.) praised Eakes for his earlier prescience about the extent of the home foreclosure problem. Last year, Eakes estimated that there would be 2 million home foreclosures, a figure that was disputed by some banking industry officials.
Dodd noted that today "we'd be lucky to have that number."
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