Committee launching probe into efforts to buoy housing market

The House Oversight panel is launching an investigation into the White House's efforts to help the housing market and reduce home foreclosures.

Rep. Edolphus Towns (D-N.Y.), chairman of the House Committee on Oversight and Government Reform, said Saturday that his committee would look into ways for the Treasury Department to speed up policies to help the housing market and whether loan servicers and banks are carrying through on their obligations. Towns said that the panel would look into how the Treasury Department defines "net present value," a key criteria for homeowners participating in the mortgage modification program.

"We are concerned that loan servicers have been slow to modify loans, inconsistent in their application of the program, and are not communicating clearly with eligible homeowners," Towns wrote in a letter to Treasury Secretary Timothy Geithner.

The Making Home Affordable program has been a centerpiece of the Obama administration's efforts to shore up the housing market, which continues to struggle under mounting foreclosures and depressed prices. The White House committed $75 billion to supporting home loan refinancings and mortgage modifications.

The program has come under heavy criticism from lawmakers and outside observers for how few trial loan modifications have been made permanent. Of the more than 900,000 loans that have entered into the government program, only a little more than 7 percent had reached a permanent modification by the end of December, according to the latest report from Treasury.

The Obama administration is taking steps to improve that rate, including changes in how homeowners provide documentation.

"If a homeowner is denied a permanent mortgage modification, the specific reasons for the denial are not revealed," Towns said. "Treasury has not established a process for homeowners to appeal the denial of a permanent mortgage modification."

Towns sent six pages of questions to the Treasury Department, Fannie Mae, Freddie Mac and the Federal Housing Finance Agency.