The new Unit on Mortgage Origination and Securitization Abuses will play an important role in holding mortgage lenders and servicers accountable for how their actions impact families, communities, and the market. Making it clear that criminal activity in the financial sector will not be tolerated is necessary to restore confidence in the mortgage market and the broader financial system.

While the details of the refinance plan have not been revealed, allowing homeowners to access low interest rates will make homeownership more affordable for those who have been able to stay current on their loans. This will ease the burdens of those who are barely hanging on to their homes and provide a welcome boost to the economy. However, it does not provide sufficient relief to those homeowners who are facing foreclosure because of unemployment, unsustainable loans, or negative equity—a well-documented driver of foreclosure. We urge policymakers and the Attorneys General negotiating a settlement with the country’s largest banks to push for principal reduction loan modifications, a critical missing piece in the response to the foreclosure crisis. With the director of the Federal Housing Finance Authority staunchly opposing principal reduction, the President should consider a change in leadership.

The initiatives laid out in the President’s State of the Union address are significant steps towards rectifying injustices in the mortgage system and making homeownership more affordable, and we applaud the President’s commitment to tracking down past wrong-doing in the financial industry and protecting consumers in future transactions. America’s neighborhoods suffering from the negative effects of vacant homes, family displacement, and economic upheaval can’t afford to wait.