"A record one million families lost their home to foreclosure last year," Merkley wrote. "Next week, Mr. President, you will have the attention of the nation. I urge you to use this opportunity to renew efforts to tackle the national foreclosure crisis."
Merkley's call for presidential leadership on foreclosures comes as infighting among federal regulators appears to have stalled out key reforms to the bank divisions that work with troubled borrowers and process foreclosures.
The FDIC has been pushing to impose new requirements on the operations of those divisions, which are known as mortgage servicers. The agency has been engaged in heated negotiations with other regulators at the Federal Reserve and the Office of the Comptroller of the Currency (OCC). According to a source familiar with the negotiations, the Fed had initially opposed the plan, but agreed to support the rules after a few weeks of negotiations. The OCC, however, which is currently responsible for regulating the largest mortgage servicers -- Wells Fargo, JPMorgan Chase, Bank of America and Citigroup -- has resisted those rules. The OCC has never publicly sanctioned a mortgage servicer, despite widespread court findings of servicer fraud in the foreclosure process.
The Treasury Department, which had supported the new rules, had expected an agreement between agencies by Friday, Jan. 14, according to a spokesman. That anticipated agreement has not yet come to fruition.
But Treasury itself is engaged in a delicate dance on foreclosure policy -- defending the foreclosure prevention program criticized by Merkley, even as it urges sweeping reform of the bank divisions that participate in that program.
"The goal of the [Home Affordable Modification Program] was to prevent three to four million foreclosures," Merkley wrote, "but to date, fewer than 600,000 homowners have been approved."