As Congress Reconsiders $700 Billion Bail-Out for Wall Street, Homeowners on Main Street and the Backsteets Facing Foreclosure Also Need Assistance
As Congress and the Administration modify the massive proposal to use taxpayers’ money to bail out the big banks and others in the financial services industry in light of the defeat in the House of Representatives earlier this week, the NAACP is continuing to work hard to ensure that every-day American families are not forgotten. The politicians should not and cannot bail out Wall Street while ignoring the needs of hard working Americans on Main Street and on the back streets of America. Congress must include protections for homeowners facing foreclosure in any legislation that bails out major financial services companies. The current financial problems we are witnessing are, among other things, a direct result of years of reckless, predatory lending driven by many of the same institutions that profited billions of dollars but are now begging the government for a public hand out. Thus, if we are to effectively address the financial instability plaguing our Nation we must tackle the home foreclosure crisis as well as bail out the large companies.
The American foreclosure crisis is being driven by the high number of predatory loans made within the last few years, and according to most studies African Americans of all income levels were more than twice as likely to receive high-cost loans. This means that, though no community has been exempted, African Americans and other racial and ethnic minority Americans are being disproportionately affected by the foreclosure epidemic; it is hurting our families and our communities at a much greater rate. In order to effectively address the unacceptably high foreclosure rate we must give homeowners more protection and control; we must level the playing field between homeowners and financial institutions. We have seen that when financial institutions are not required to negotiate loan modifications they do not occur at a rate necessary to adequately address our national problem. We need to mandate that lenders enter into negotiations that may result in a modified loan in which homeowners are obliged to pay a reasonable, sustainable market rate for their mortgage.
Specifically, the NAACP supports federal legislation that would:
- allow bankruptcy courts to supervise loan modifications on primary residences, effectively mediating between lenders and homeowners;
- place a moratorium on home foreclosures for at least 9 months to allow homeowners to find and take remedial action;
- require a homeowner or servicer to pursue specific loss mitigation activities such as waiving late fees and other charges, establishing an affordable repayment plan or loan modification, forbearance or a short refinancing before a home may be foreclosed;
- protect renters who may reside in homes going through foreclosure;
- provide adequate funding for the National Affordable Housing Trust Fund, which must use the money for the production, preservation, rehabilitation or operation of rental housing for extremely low-income households; and
- There must be comprehensive oversight and regulation to protect American consumers.
Finally, the NAACP is also strongly opposed to any legislation that would provide immunity to any financial service provider from lawsuits that address years of racially discriminatory actions.