Friday, July 6, 2012

Don’t Quit the Dream: A Vision for Homeownership Beyond 2012

After years marked by stalemate and indecision, 2012 has delivered a glimmer of hope for families and the housing market.  The Department of Justice kicked off the year with a historic settlement with Bank of America regarding predatory loans made by Countrywide before the Bank acquired the company in 2008.  Not to be outdone, 49 state Attorneys General delivered the largest settlement made thus far on behalf of families who experienced wrongful foreclosure.  And just last week, California’s state legislature approved a bill to end the practice known as dual track—where a homeowner’s loan modification and foreclosure are processed at the same time.  Now servicers will have to suspend foreclosure while a family is being evaluated for a home-saving solution.  Our community’s skepticism is warranted as we’ve heard the promises before, only to be disappointed with one failed program after another.  But there is one reason to think that these latest efforts may be the precursor to true relief:  elected officials finally seem to have gotten the message that voters care about housing. 

In polls, voters often identify the troubled state of the economy as their top concern.  Most economists agree that housing remains the biggest drag on our recovery.  Eleven million homeowners owe more than their home is worth.  That’s 11 million people who are keeping themselves out of the consumer economy.  Some of this is a good thing; people are paying down their debt and padding their savings.  But for most, that negative equity looms large over the family finances.  Not only is household consumption down, but families are delaying purchases of major goods that drive our economy, such as cars and houses.
On Monday, July 9, HUD Secretary Shaun Donovan and CFPB Director Richard Cordray will speak before hundreds of Hispanic leaders at the 2012 NCLR Annual Conference in Las Vegas at 6:00 p.m. ET/3:00 p.m. PT.  If you’re in town, you can join us at the Mandalay Bay (it’s free and open to the public).  If you can’t be there in person, you can watch it live here.  Our message is clear:  Don’t quit the dream.  The settlements secured earlier this year are a critical step forward, but their ultimate impact will only be realized if implemented well.  This town hall is part of the Home for Good Campaign—a venue for local voters to challenge our presidential candidates on their solutions to the persistent housing slump.

For as much consensus as there is around solutions, the lack of movement from Washington is shocking.  Principal reduction is widely recognized as the best way to head off an unnecessary foreclosure, thereby sparing the neighborhood one more abandoned property and keeping local taxes flowing to municipalities.  Analysis of the various methods servicers use to stave off foreclosure shows that homeowners are most successful when the principal balance is written down to a value closer to what the home is actually worth.  Perhaps the best evidence is that the banks and servicers are putting this strategy to work on the loans they hold on their books.

Republican candidate Mitt Romney’s solution is to let the housing market bottom out, and he and President Obama both support refinancing as way to help the market rebound.  These strategies have not worked so well for Latino families in hot foreclosure states like Florida, Nevada, California, and Arizona, where home values may be as little as 50% of what they were a few years ago.  During another session at the NCLR Annual Conference, we will share data that shows that Latinos accounted for only 4.2% of all refinancing loans originated in 2010 compared to 87% for White homeowners.  Meanwhile Fannie Mae and Freddie Mac overseer Ed DeMarco continues to be the major obstacle preventing implementation of the best tool for restoring housing stability—principal reduction. 

The hope is that with robust implementation of the 49-state AG settlement, the evidence for principal reduction will grow.  Most of us are not content to wait that long.  Voters in California showed they can persevere—the bill had failed three times before—when they stand up and let their elected officials know what they want.  Now it’s time to deliver that kind of success to other states.  Here is what you can do:  Tell the presidential candidates you want to see better solutions now.  Join us at the Don’t Quit the Dream town hall or follow us on Twitter at #NCLR12 to get your side of the story on the public record.  Together we can make 2012 the year to turn around the housing market. 

Wednesday, July 4, 2012

Celebrate with Us!

Happy Independence Day, everyone!  This week, we certainly appreciate the value of our democratic system at work.  On July 2, the California legislature passed the California Foreclosure Reduction Act (AB 278 / SB 900), which will finally put an end to the unfair “dual track” system—the counterproductive practice of processing foreclosure papers while also moving a family through a loan modification.  This historic step is a critical one in a series of those that will repair the housing market.

On April 19, the National Council of La Raza (NCLR), the Center for Responsible Lending, and other local partners rallied on the capitol lawn in Sacramento, California in support of the proposed Housing Bill of Rights under the foreclosure act.  By invitation from the California Attorney General Kamala Harris, NCLR President and CEO Janet Murguía testified later that day, detailing the importance of prohibiting dual track.  NCLR affiliates also helped generate 400 calls to Senator Ron Calderon letting him and other decision-makers know that this is exactly what the state needs to stop the flow of needless foreclosures.  These efforts have culminated in a great success.

We know that the banks fought this legislation very aggressively.  According to Americans for Financial Reform, lenders spent $70,000 a day on lobbyists and other efforts to prevent this bill from passing.  As informed voters and advocates, we fought back and won.  The following are some of our most important wins.  The new law:

  • Prohibits dual tracking where a bank forecloses on a homeowner at the same time they are negotiating a modification
  • Guarantees a single point of contact for struggling homeowners
  • Creates civil penalties for fraudulently signing mortgage documents (robosigning)

We know that this law will deeply and positively impact communities of color in particular, as a disproportionate number have been held in limbo or unnecessarily lost their homes when they could have received a loan modification.  Many Californians will find relief as a result of the decision, and this commonsense legislation sets a strong precedent for states to follow suit. There is still much we as advocates, homeowners, and renters can do to fight for a sound housing system, but today we have many reasons to celebrate.

Tuesday, July 3, 2012

Blogger Carnival: Reducing Inequality Starts in the Home

June and thus National Homeownership Month has come to a close and folks are gearing up to celebrate Independence Day. Before moving onto the 4th, though, we wanted to emphasize the importance of housing reform and market challenges by posting the great entries we received from our blog carnival. These posts celebrate National Homeownership Month and echo the main messages behind our Home for Good campaign: that we must 1) put an end to the needless foreclosures happening in some of the most vulnerable communities in the country and 2) remind our presidential candidates and other leaders to share with the nation their solutions.

This housing crisis exposed weaknesses in the housing system that have long affected low-income families and communities of color. It is estimated that 25% of Black and Hispanic borrowers in the U.S. lost homes or are at serious risk of losing their homes, compared to 12% of White borrowers. In our town hall tour, we have encountered many people who embody that statistic. They are struggling with a system that all too often is built to work against them. Through our Home for Good campaign, we aim to reduce that inequality and help keep more homeowners in their homes!

Thank you to everyone who participated, and enjoy these featured blog posts! (Originally posted on June 29 2012)


Loss of homes by Latino homeowners signals an erosion of equality in the nation, Marisa Treviño, Founder and Publisher, Latina Lista
LatinaLista — As June, otherwise known as National Homeownership Month, draws to an end so does the American Dream for many Americans, especially Latino and black home owners. RealtyTrac reports that banks took back 54,844 properties last month, up 7 percent from April. This is a discouraging sign in an economy where Latino homeowners have already lost 60 percent of their wealth since the onset of the housing collapse in 2008.

In an economy where foreclosures are the item of the day and minorities are bearing the brunt of it, the need to adopt successful policies is critical to help both Latinos and African Americans who are about to lose their homes. The U.S. Department of Housing and Urban Development, commonly known as HUD, is responsible for creating policies and programs to assist homeowners. However, HUD’s efforts have had difficulty taking off. 

Vacant properties in Latino communities: a discouraging irony, Julianna Gonzalez-Crussi, Policy Analyst & Housing Outreach Coordinator, Latino Policy Forum, Connector 
Take a walk down a block in any predominately-Latino neighborhood and you’ll be confronted with one the United States’ greatest present-day ironies: As one household is overcrowded, its space stretched to accommodate extended family or friends who have fallen on hard times, the home next door sits vacant, its windows covered with plywood and its yard untended. 

Housing struggles in America often become pervasive problems in people’s lives, particularly in minority communities. Spotlight has covered these issues as well, most notably in last winter’s exclusive commentary series, “How Housing Matters to Families and Communities,” undertaken in partnership with the MacArthur Foundation. 

Homeowners Can't Afford Another Missed Opportunity, Janis Bowdler, NCLR, Huffington Post, Latino Voices
When the housing bubble burst more than four years ago, many banks and federal regulators argued that the impact would be limited and the damage contained to the subprime market. Famous last words.