The Obama administration has more work to do to help struggling U.S. homeowners, despite signs of a stabilizing housing market, a senior Treasury official said on Monday.
Michael Barr, the Treasury's assistant secretary for financial institutions, said in prepared remarks to state housing agency officials that the Obama administration's housing policies are helping to stabilize housing markets.
He said mortgage rates remain near historic lows, unsold home inventories are falling and prices are declining less rapidly in most markets with some prices increasing.
However, even with these signs of progress, we have more work to do to help American homeowners and the U.S. housing market. Families are struggling and communities are hurting. Foreclosure and delinquency rates remain high, Barr said.
Elevated unemployment is making it difficult for many families to make their mortgage payments, he added, noting that one in four homeowners owed more on their mortgages than the property is currently worth.
Barr's remarks did not mention any specific new programs or initiatives beyond the implementation of a new $1.5 billion aimed at supporting homeowners in five states experiencing the most severe price declines -- California, Florida, Nevada, Arizona and Michigan.
The so-called Hardest Hit Fund will provide money to state and local housing agencies to launch programs that help unemployed workers keep their homes, that help underwater homeowners and that help modify or reduce second-lien mortgages.
The states participating in the program will be asked to submit program designs to Treasury by April. We are working together to ensure that assistance will reach struggling homeowners in these hard-hit states as quickly as possible.
House of Representative Financial Services Committee Chairman Barney Frank is ratcheting up pressure on big mortgage providers to write down second mortgages to prevent a deepening crisis in the housing market.
(Reporting by David Lawder; Editing by Neil Stempleman)