By Mike Lillis - 10/25/11 06:54 PM EDT
Echoing a growing number of House Democrats, Rep. John Larson (D-Conn.) warned Tuesday that the Obama administration’s new anti-foreclosure strategy alone won’t solve the housing crisis.
Larson, who heads the House Democratic Caucus, said the administration's new housing reforms are “a good step” toward stabilizing the volatile housing market but more needs to be done to help struggling Americans keep their homes.
“Our caucus is pleased to see the president come up with his program,” Larson said during a press briefing in the Capitol, “Our caucus would like to see more done, as well.”
Rep. Anna Eshoo (D-Calif.) said Obama “took a positive first step” with the changes, but “it's not enough.”
“Up to a million families nationally could be helped,” Eshoo said in an email, “but there are two million underwater homeowners in California alone.”
Launched in 2009, HARP was designed to help between 3 million and 4 million underwater homeowners refinance to obtain cheaper loans, but fewer than 900,000 have participated.
In an effort to improve that record, FHFA announced Monday that it’s eliminating the current 125 percent loan-to-value ratio cap, as well as new appraisal requirements and certain fees currently slapped on homeowners who refinance into shorter-term mortgages.
Eshoo is pushing the administration to take bolder action, including efforts to reduce principal balances and adopt a “Homeowner’s Bill of Rights” that would simplify the often confusing relationship between lenders, borrowers and mortgage servicers.
“The size and scope of this housing crisis requires us to think big,” Eshoo said. “Our nation’s economy simply will not recover until the crisis of foreclosures is over.”
Rep. Jim Costa agreed. The California Democrat , who represents a district that's been decimated by the housing bust, said the FHFA changes are “too little, too late.”
“Tweaks alone will not solve the housing crisis,” Costa said Monday in a statement. “We need wholesale change to our disjointed housing policy.”
The Democrats have a key ally in leadership in Larson, who emphasized Tuesday that "there's more to be done.”
“There's a lot of room there for us to work together and expand [the FHFA effort], but I commend the president for his initiative," Larson said.