NAACP Supports Congressional Initiatives to Help Homeowners Facing Foreclosure
The mortgage foreclosure crisis is reaching staggering proportions all across the Nation. In June 2008, more than 250,000 homes were at some stage in the foreclosure process; this number is up by more than 53% over June of 2007. Furthermore, African Americans are being disproportionately affected. The 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 twice as likely or more than twice as likely to receive high-cost loans.
To help homeowners who are facing foreclosure, the NAACP supports three measures which would help level the playing field between homeowners and those holding the loans. These three measures would make lenders more interested in helping homeowners modify their loans so that they are still obliged to pay a reasonable, market rate for their mortgage and not lose their homes.
The first initiative, H.R. 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007 was introduced by Congressman Brad Miller (NC). A companion bill, S. 2136, was introduced by Senator Richard Durbin (IL). This legislation, which has bi-partisan support, would allow courts to supervise loan modifications on primary residences, effectively mediating between lenders and homeowners. The second legislative initiative, H.R. 6076, the Home Retention and Economic Stabilization Act of 2008, introduced by Congresswoman Doris Matsui of California, places a moratorium on home foreclosures for 9 months to allow homeowners to find and take remedial action. Lastly, the NAACP supports H.R. 5679, the Foreclosure Prevention and Sound Mortgage Servicing Act of 2008 which was introduced by Congresswoman Maxine Waters of California. This legislation requires 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.
All three of these bills would provide consumers / homeowners facing foreclosure with some much-needed tools, whether it be the requirement that mortgage servicers work with them to try to avoid foreclosure, or a cooling out period to allow homeowners time to try to modify their mortgages and stay in their homes or allowing the courts to try to mediate a modification. All three of these bills would require the financial services industry to do more to help avoid foreclosures; heretofore all successful attempts to address this crisis, while laudable, have been based on the holders of the loan acting on a purely voluntary basis to try to avoid foreclosures.