Durbin presses Geithner on foreclosures

Senate Majority Whip Dick Durbin (D-Ill.) criticized the Obama administration Tuesday for not doing enough to stem foreclosures.

Durbin, who has pushed for legislation allowing judges to modify mortgages for troubled homeowners, said he remains "skeptical that the voluntary approach to mortgage [modifications] will save us from this crisis."

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"The previous administration and so far this administration has failed to come up with an approach that could dramatically turn around this increasing number of foreclosures," Durbin told Treasury Secretary Timothy Geithner during a Senate Appropriations subcommittee hearing.

He cited economic projections that there could be as many as 8 million foreclosures in coming years, after there were more than 2 million foreclosures last year.

Durbin, one of President Obama's closest allies in the Senate, pushed a bill last month allowing mortgage modifications, known as "cramdown," but it stalled when a dozen Democrats joined Republicans in opposing the measure. President Obama had endorsed the bill, but mortgage companies and banks fiercely fought to stop it. Opponents said that it would have rewarded homeowners who bought property that they couldn't afford.

Geithner said that the administration's efforts to fight foreclosures are only starting to take effect now.

"Realistically, I don't think we're going to know probably until early fall whether we've got the incentives right and have proved powerful enough," Geithner said. "Our judgment is this is the best package of incentives."

The president has proposed a public-private partnership to help subsidize homeowners who refinance their home loans. Obama has said that it could help as many as 9 million Americans stay in their homes.