Statement by Priscilla Almodovar

NEW YORK, NY (12/03/2007)(readMedia)-- We compliment Secretary Paulson for proposing that states be allowed to use their tax-exempt bonding authority to fund innovate mortgage refinancing efforts like New York State’s Keep the Dream program. We are also gratified that the Secretary recognizes the important role that states are playing in addressing the mortgage crisis and the importance of close cooperation between the states and the Federal government in crafting effective remedies.

However, the current demand for tax-exempt volume cap in New York State significantly outstrips supply because of rising housing costs and other financing issues. For these reasons, the Secretary’s proposed flexibility will not work unless the Federal government at the same time increases bonding authority to the states, or creates a special allocation for mortgage refinancing programs. We should also emphasize that state refinancing programs—even if expanded—will not help all borrowers currently at risk. But they do have the potential to help a significant number of borrowers and prevent the mortgage crisis from getting worse.

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