With mortgage foreclosures still climbing at a record clip, U.S. Sen. Jack Reed Wednesday introduced legislation to curb those rates, help keep families in their homes and prevent communities from deteriorating. The bill aims to stabilize the housing sector “as a foundation for lasting economic recovery.”

The Preserving Homes and Communities Act of 2009 seeks to address a housing crisis that Reed said “has devastated families, crippled local communities, and dragged down the broader economy.” It is co-sponsored by R.I. Sen. Sheldon Whitehouse, Sen. Dick Durbin of Illinois and Sen. Jeff Merkley of Oregon.

Reed, a senior member of the Senate Banking Committee, said his bill proposes federal efforts that are “similarly aggressive” to efforts that shored up financial markets.

“A critical issue that’s affecting so many families in Rhode Island and the national economy is the increased number of foreclosures,” Reed said in a phone interview. “We’re not satisfied with the rate of modifications, and we think the financial industry can do more, and must do more, quickly.”

The bill would require that qualified homeowners be evaluated for and offered loan modifications; would establish a new mortgage payment assistance program; and provide incentives for state and local governments to create mediation programs that would allow homeowners and servicers to meet face to face to try to find an alternative to foreclosure.

Its authorizations would include: $6.375 billion to allow states to create revolving loan funds for grants or subsidized loans to homeowners; $80 million in competitive federal matching funds for states and localities to establish mandatory mediation programs; $5 million for the Department of Housing and Urban Development, in conjunction with other agencies, to develop a single database to monitor mortgage markets.

Reed said he and the co-sponsors met Tuesday with Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan and asked them “to do more, and do it faster,” and to “put the emphasis on loan modifications.”

The visit followed up Reed’s requests to the two secretaries this summer that urged the agencies “to hold banks and lenders accountable for providing relief to qualified homeowners” by requiring that lenders respond to homeowners in a timely fashion.

Reed added, “They’re not adverse to other legislative approaches to help speed up the modifications, and we’re offering to give them more legislative tools to do the job.”

To read more about the Preserving Homes and Communities Act of 2009, visit reed.senate.gov/newsroom/details.cfm?id=318453.

kziner@projo.com