The Foundry

Explaining new Republican support for congressional action on housing, Sen. John Thune (R-SD) admitted to Politico: “You always want to be able to vote for something … Most people want to see us doing something and being responsive.” The “do something” mentality seems to be bipartisan on Capitol Hill as Rep. Barney Frank admitted it was “irrelevant” how many people would actually be helped by his plan: “I would hope a million [would benefit]. It’s irrelevant. There’s no downside. Why not try?”

Well here is a reason to not try: the Frank plan will put billions of taxpayer dollars at risk and undermine the already successful Hope Now program. Hope Now is a voluntary alliance of scores of servicers, investors, counselors, and other mortgage market participants ranging from Catholic Charities to the Bank of America. Participants in the alliance seek to reach out aggressively to potentially at-risk, credit-worthy homeowners to help them rework their mortgages. With the help of the Hope Now alliance, the mortgage industry is helping more than 160,000 families a month to keep their homes either by modifying their loans or by developing more realistic repayment plans.