Remarks by Treasury Secretary Paulson

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To speed up the modification process, Treasury is working through the HOPE NOW alliance with the American Securitization Forum to convene servicers and investors so they can develop categories of borrowers eligible for appropriate modifications and refinancings, and an industry-wide solution. This work takes time, as all parties seek to define categories of borrowers for streamlined refinance and modification where that is in the best interest of both the borrower and the mortgage investor. I am confident they will finalize these standards soon. And I expect all servicers will implement them quickly, and create benchmarks to measure their progress along the way. As a result, what was a fragmented, cumbersome process can be a coordinated effort which more quickly helps able homeowners.

Through continued, dedicated efforts by industry, non-profit organizations and the government, we can strike the necessary balance to mitigate the risk to our economy of the housing downturn. The issues are complex, and will take time. We are working aggressively and quickly, utilizing available tools and creating new ones, to help financially responsible but struggling homeowners. This, in turn, helps their neighbors, by preventing foreclosures and sales which can drive down property values and undermine the financial stability of families and communities; it also helps investors and lenders avoid unnecessary and costly foreclosures that are not in their interest.

We will continue these efforts, measuring progress and making adjustments when necessary, to ensure as many able homeowners as possible are reached and helped. The Administration and the private sector are taking action. Congress now needs to also act—to appropriate funds for mortgage counseling, to pass FHA modernization and GSE oversight legislation, to pass legislation to temporarily relieve tax liability for mortgage debt forgiven, and legislation to temporarily increase capacity and allow state and local governments new flexibility to use tax-exempt bonds for home mortgage refinancings. The U.S. economy and America's communities deserve no less.