It’s Time for the Candidates to Get Specific on the Homeownership Crisis

Now that the presidential tickets are set, it’s time for the candidates to get specific about problems and solutions critical to our economic recovery and future prosperity. Along with job creation, they should start with Home Opportunity—the cluster of housing, homeownership, and fair lending issues that are so central to the American promise of opportunity for all.

America continues to face a Home Opportunity crisis, with 2 million foreclosure filings this year, and millions more families at risk. That’s millions of senior citizens losing their economic security, children and families uprooted, neighborhoods blighted with vacant properties, and a continued drag on our economy.

What’s more, unequal opportunity and the discriminatory targeting of communities of color by unscrupulous brokers and lenders means that minority families continue to be especially hard hit. Major discrimination settlements by the Justice Department against Countrywide, Wells Fargo, and other major lenders reveal that, despite the progress we’ve made as a nation, Americans of color have been especially unlikely to get a fair deal from the banks. That translates to a historic loss of community assets and wealth that hurts us all.

Unlike employment, however, Home Opportunity has received inadequate attention in the general election campaign, despite its undisputed political, as well as economic, importance. For swing states like Florida (with 25,534 new foreclosure filings in July alone) and Nevada (with 26,498 filings), these questions are especially pressing. Amazingly though, neither campaign’s homepage includes housing, homeownership or foreclosures among the featured issues.

Early in his campaign, Mitt Romney famously told the Las Vegas Review Journal, “Don’t try to stop the foreclosure process. Let it run its course and hit the bottom.” Months later, he appeared to shift position, saying in Florida: “The idea that somehow this is going to cure itself by itself is probably not real. There’s going to have to be a much more concerted effort to work with the lending institutions and help them take action, which is in their best interest and the best interest of the homeowners.”

Romney also said in a Republican debate that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac—the historic guarantors of the 30-year fixed mortgage for generations of middle class Americans—“were a big part of why we have the housing crisis in the nation that we have.” In neither case, however, have specific solutions followed. Romney has, by contrast, called for eliminating the Consumer Financial Protection Bureau and the Dodd-Frank legislation that created it.

As incumbent, President Obama has implemented multiple measures, including the Bureau, the Making Home Affordable program, housing counseling, and joining 49 state attorneys general in a national mortgage settlement with five major banks. (Intriguingly, Republican VP candidate Paul Ryan’s constituent services site refers Wisconsans with homeownership woes to the latter three programs for assistance).

Yet, most analysts agree that Making Home Affordable has fallen short of Administration goals, and that the national mortgage settlement, while helpful, does not reach the majority of homeowners who could benefit from its terms. Many argue, in particular, that the President can do more to extend principal reduction—shrinking the principal owed on mortgages to reflect homes’ fair market value—to mortgages backed by Fannie and Freddie. And while the Administration outlined three options for the future of those enterprises over a year ago, the President’s preferred agenda for them remains unclear.

The Obama Justice Department has been aggressive in settling discrimination suits against major lenders, but Candidate Obama has not discussed the role of discrimination in creating the housing crisis, nor the role of future equal opportunity efforts in solving it.

In short, the candidates, as candidates, have yet to articulate to the American people their respective visions for the future of Home Opportunity. How will each address the lender misconduct and inadequate rules that led to the current crisis? How will each ensure that families with the resources to be successful homeowners are not thwarted by future misconduct, arbitrary restrictions, or a lack of sound information? How will each help rejuvenate neighborhoods devastated by predatory lending and mass foreclosures? And how will each ensure that people of all races, ethnicities, and communities have an equal opportunity to pursue the American Dream?

With the tickets now set, it’s the candidates’ responsibility to get specific on these questions, so critical to the nation’s choice of the next president. As voters, it’s our responsibility to demand that they do.

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It’s Time for Home Opportunity

Dramatic developments this month have underscored our nation’s progress, as well as our continuing peril, when it comes to Home Opportunity—the deeply held idea that everyone should have access to an affordable home under fair conditions. These developments, both positive and negative, should inform the national choices ahead, including in the presidential race.

On July 11th, California lawmakers enacted the groundbreaking California Homeowner Bill of Rights, halting unfair bank practices that have forced thousands of Californians into foreclosure. Among other protections, it restricts “dual-track” foreclosures, in which lenders preemptively foreclose on homeowners who are in active negotiations to save their homes. Importantly, the law also empowers consumers to hold lenders accountable in court.

Just a day later, the U.S. Justice Department announced a landmark settlement of lending discrimination charges against Wells Fargo. The settlement provides $125 million in compensation for borrowers who the Justice Department says Wells Fargo or its brokers steered into risky and expensive subprime mortgages, or charged higher fees and rates than white borrowers, solely because of their race. The discrimination “resulted in more than 34,000 African-American and Hispanic borrowers paying an increased rate for loans simply due to the color of their skin,” according to Deputy Attorney General James Cole.

The Wells Fargo agreement builds on an earlier Justice Department settlement—the largest ever—against Countrywide Financial Corporation for racial discrimination that included a widespread pattern of discrimination against qualified African-American and Hispanic borrowers in mortgage lending. And on July 20, the Justice Department asked a judge to compel New York’s Westchester County to provide information on local zoning practices that might be racially discriminatory. This was a long-overdue step, since Westchester has consistently flouted the terms of a historic fair housing settlement it agreed to three years ago after decades of fostering neighborhood segregation.

These are important developments that, together, help to address the harm that years of lender misconduct and lax rules and enforcement have done to millions of American homeowners and our larger economy. They are making a difference, with the number of Americans facing foreclosure activity declining 11 percent in the first half of 2012, compared with the same period last year.

But much more is needed. Over one million homes and properties still saw foreclosure filings in the first half of this year. That’s hundreds of thousands of senior citizens losing their economic security, children and families disrupted, neighborhoods blighted with vacant properties, lifetimes of economic security destroyed.

And the financial institutions that wrecked our economy have continued their misconduct in different forms. This week, for example, JPMorgan Chase agreed to pay $100 million to settle a lawsuit filed by its customers accusing the firm of improperly increasing minimum payments on borrowers whom they knew could not afford to pay more, generating ill gotten income from the resulting late fees. This, after JPMorgan gambled and lost its clients’ money to the tune of at least $5.8 billion.

And after the British bank Barclays settled with U.S. and British regulators for $453 million, admitting to manipulating the London interbank offered rate, or Libor (a benchmark that underpins hundreds of trillions of dollars in contracts), over a dozen additional banks are now being investigated for similarly rigging exchange rates on international markets.

It’s time for Home Opportunity—American homeownership, fair lending, fair housing—to return to the national debate. That has begun, with the rise of Home for Good, a national campaign driven by people and organizations throughout the nation concerned about the enduring foreclosure and housing crisis. That effort is equipped with clear, practical solutions, in the form of a Compact for Home Opportunity developed by housing, lending, and consumer protection experts around the country.

With the presidential contest now in full swing, it’s time for the candidates to take a stand on this crucial economic and moral issue. President Obama has taken important steps, yet he’s avoided some of the most bold and effective remedies that are available to him. Governor Romney has been mostly silent on what his Administration would do to restore Home Opportunity. It’s time we demanded clarity and commitment from each of them.

 

 

It’s Time for Home Opportunity

Dramatic developments this month have underscored our nation’s progress, as well as our continuing peril, when it comes to Home Opportunity—the deeply held idea that everyone should have access to an affordable home under fair conditions. These developments, both positive and negative, should inform the national choices ahead, including in the presidential race.

On July 11th, California lawmakers enacted the groundbreaking California Homeowner Bill of Rights, halting unfair bank practices that have forced thousands of Californians into foreclosure. Among other protections, it restricts “dual-track” foreclosures, in which lenders preemptively foreclose on homeowners who are in active negotiations to save their homes. Importantly, the law also empowers consumers to hold lenders accountable in court.

Just a day later, the U.S. Justice Department announced a landmark settlement of lending discrimination charges against Wells Fargo. The settlement provides $125 million in compensation for borrowers who the Justice Department says Wells Fargo or its brokers steered into risky and expensive subprime mortgages, or charged higher fees and rates than white borrowers, solely because of their race. The discrimination “resulted in more than 34,000 African-American and Hispanic borrowers paying an increased rate for loans simply due to the color of their skin,” according to Deputy Attorney General James Cole.

The Wells Fargo agreement builds on an earlier Justice Department settlement—the largest ever—against Countrywide Financial Corporation for racial discrimination that included a widespread pattern of discrimination against qualified African-American and Hispanic borrowers in mortgage lending. And on July 20, the Justice Department asked a judge to compel New York’s Westchester County to provide information on local zoning practices that might be racially discriminatory. This was a long-overdue step, since Westchester has consistently flouted the terms of a historic fair housing settlement it agreed to three years ago after decades of fostering neighborhood segregation.

These are important developments that, together, help to address the harm that years of lender misconduct and lax rules and enforcement have done to millions of American homeowners and our larger economy. They are making a difference, with the number of Americans facing foreclosure activity declining 11 percent in the first half of 2012, compared with the same period last year.

But much more is needed. Over one million homes and properties still saw foreclosure filings in the first half of this year. That’s hundreds of thousands of senior citizens losing their economic security, children and families disrupted, neighborhoods blighted with vacant properties, lifetimes of economic security destroyed.

And the financial institutions that wrecked our economy have continued their misconduct in different forms. This week, for example, JPMorgan Chase agreed to pay $100 million to settle a lawsuit filed by its customers accusing the firm of improperly increasing minimum payments on borrowers whom they knew could not afford to pay more, generating ill gotten income from the resulting late fees. This, after JPMorgan gambled and lost its clients’ money to the tune of at least $5.8 billion.

And after the British bank Barclays settled with U.S. and British regulators for $453 million, admitting to manipulating the London interbank offered rate, or Libor (a benchmark that underpins hundreds of trillions of dollars in contracts), over a dozen additional banks are now being investigated for similarly rigging exchange rates on international markets.

It’s time for Home Opportunity—American homeownership, fair lending, fair housing—to return to the national debate. That has begun, with the rise of Home for Good, a national campaign driven by people and organizations throughout the nation concerned about the enduring foreclosure and housing crisis. That effort is equipped with clear, practical solutions, in the form of a Compact for Home Opportunity developed by housing, lending, and consumer protection experts around the country.

With the presidential contest now in full swing, it’s time for the candidates to take a stand on this crucial economic and moral issue. President Obama has taken important steps, yet he’s avoided some of the most bold and effective remedies that are available to him. Governor Romney has been mostly silent on what his Administration would do to restore Home Opportunity. It’s time we demanded clarity and commitment from each of them.

 

 

It’s Time for Home Opportunity

Dramatic developments this month have underscored our nation’s progress, as well as our continuing peril, when it comes to Home Opportunity—the deeply held idea that everyone should have access to an affordable home under fair conditions. These developments, both positive and negative, should inform the national choices ahead, including in the presidential race.

On July 11th, California lawmakers enacted the groundbreaking California Homeowner Bill of Rights, halting unfair bank practices that have forced thousands of Californians into foreclosure. Among other protections, it restricts “dual-track” foreclosures, in which lenders preemptively foreclose on homeowners who are in active negotiations to save their homes. Importantly, the law also empowers consumers to hold lenders accountable in court.

Just a day later, the U.S. Justice Department announced a landmark settlement of lending discrimination charges against Wells Fargo. The settlement provides $125 million in compensation for borrowers who the Justice Department says Wells Fargo or its brokers steered into risky and expensive subprime mortgages, or charged higher fees and rates than white borrowers, solely because of their race. The discrimination “resulted in more than 34,000 African-American and Hispanic borrowers paying an increased rate for loans simply due to the color of their skin,” according to Deputy Attorney General James Cole.

The Wells Fargo agreement builds on an earlier Justice Department settlement—the largest ever—against Countrywide Financial Corporation for racial discrimination that included a widespread pattern of discrimination against qualified African-American and Hispanic borrowers in mortgage lending. And on July 20, the Justice Department asked a judge to compel New York’s Westchester County to provide information on local zoning practices that might be racially discriminatory. This was a long-overdue step, since Westchester has consistently flouted the terms of a historic fair housing settlement it agreed to three years ago after decades of fostering neighborhood segregation.

These are important developments that, together, help to address the harm that years of lender misconduct and lax rules and enforcement have done to millions of American homeowners and our larger economy. They are making a difference, with the number of Americans facing foreclosure activity declining 11 percent in the first half of 2012, compared with the same period last year.

But much more is needed. Over one million homes and properties still saw foreclosure filings in the first half of this year. That’s hundreds of thousands of senior citizens losing their economic security, children and families disrupted, neighborhoods blighted with vacant properties, lifetimes of economic security destroyed.

And the financial institutions that wrecked our economy have continued their misconduct in different forms. This week, for example, JPMorgan Chase agreed to pay $100 million to settle a lawsuit filed by its customers accusing the firm of improperly increasing minimum payments on borrowers whom they knew could not afford to pay more, generating ill gotten income from the resulting late fees. This, after JPMorgan gambled and lost its clients’ money to the tune of at least $5.8 billion.

And after the British bank Barclays settled with U.S. and British regulators for $453 million, admitting to manipulating the London interbank offered rate, or Libor (a benchmark that underpins hundreds of trillions of dollars in contracts), over a dozen additional banks are now being investigated for similarly rigging exchange rates on international markets.

It’s time for Home Opportunity—American homeownership, fair lending, fair housing—to return to the national debate. That has begun, with the rise of Home for Good, a national campaign driven by people and organizations throughout the nation concerned about the enduring foreclosure and housing crisis. That effort is equipped with clear, practical solutions, in the form of a Compact for Home Opportunity developed by housing, lending, and consumer protection experts around the country.

With the presidential contest now in full swing, it’s time for the candidates to take a stand on this crucial economic and moral issue. President Obama has taken important steps, yet he’s avoided some of the most bold and effective remedies that are available to him. Governor Romney has been mostly silent on what his Administration would do to restore Home Opportunity. It’s time we demanded clarity and commitment from each of them.

 

 

Poverty, Opportunity, and the 2012 Presidential Election

A recent forum in Washington, D.C., sponsored by the W.K. Kellogg Foundation, provided an in-depth discussion into the level of concern in the United States about poverty and opportunity, particularly concerning children.Spotlight on Poverty also looked at whether or not these issues will be factors in the upcoming presidential election. Overall, people believe strongly that equal opportunity for children of all races is very important; that not all children currently have full access to opportunity; and that presidential candidates’ views on poverty are very important. But, many think that neither the candidates nor the media are discussing poverty enough.

Interestingly, there were substantial numbers of Republicans who agreed with Democrats and Independents in several of the poll’s questions. (The corresponding national poll of likely voters undertaken at the end of last year highlighted several key points; all graphics are from this poll's report.) 

Most importantly, 88 percent of respondents said that “candidates’ positions on equal opportunity for children of all races are important in deciding their vote for President,” and 55 percent said that they were very important.  

Among Democrats, 70 percent agreed that candidates’ views in this area arevery important (and an additional 25 percent said they are somewhat important). Fifty-five percent of Independents said that candidates’ views arevery important (and an additional 28 percent said they are somewhat important).  Among Republicans, 44 percent agreed that candidates’ views in this area are very important (and 42 percent said they were somewhat important). Agreeing that they are very important were 85 percent of African Americans, 62 percent of Hispanics, and 51 percent of Whites.

But, despite the level of belief in equal opportunity for children, many voters do not believe that all children have full access to it as of yet. Over half of the respondents say that “children of different races tend to face unequal barriers to opportunity.” 

In this question, researchers pointed out significant differences in the breakdowns: “By party, 70 percent of Democratic voters said children face unequal barriers, compared to 50 percent of Independents, and only 38 percent of Republicans. By race, 50 percent of white voters said children face unequal barriers, compared to a solid majority (62 percent) of non-white voters who said so as well. Nearly three-fourths (72 percent) of African American voters said children of different races face unequal barriers. Somewhat surprisingly, only 48 percent of Hispanic participants agreed.”

There was strong feedback from the public that candidates’ views on poverty matter in deciding on their vote for president. Almost nine in ten respondents said that this was very (45 percent) or somewhat (42 percent) important.

Within specific demographics, 61 percent of Democrats, 42 percent of Independents, and 33 percent of Republicans agreed that candidates’ views on poverty are very important. (Another 35 percent, 40 percent, and 51 percent, respectively, agreed that candidates' views are somewhat important). Agreeing that candidates' views are very important were 76 percent of African Americans, 57 percent of Hispanics and 39 percent of Whites. 

Despite the importance of this topic to voters, almost half of the respondents said that “they have not heard enough from presidential candidates about reducing poverty.” This includes four in ten Republicans, just under half of Independents, and six in ten Democrats. Half of both Whites and African Americans agree with this opinion, along with more than four in ten Hispanics.

When asked if the media has adequately covered poverty reduction during this campaign, half said no, while four in ten thought they had (10 percent didn’t know or didn’t answer). By party, six in ten Democrats said that the media hadn’t covered this issue enough, as did half of Independents and four in ten Republicans. By race, this opinion was expressed by about half of Whites and Hispanics, and by almost six in ten African Americans.

Childhood poverty can have severe, long-lasting results. The Urban Institute found the following

  • Sixty-three percent of children enter adulthood without experiencing poverty, but 10 percent of children are persistently poor, spending at least half their childhoods living in poverty.
  • Black children are roughly 2.5 times more likely than white children to ever experience poverty and 7 times more likely to be persistently poor.
  • Children who experience poverty tend to cycle into and out of poverty, and most persistently poor children spend intermittent years living above the poverty threshold.
  • Being poor at birth is a strong predictor of future poverty status. Thirty-one percent of white children and 69 percent of black children who are poor at birth go on to spend at least half their childhoods living in poverty.
  • Children who are born into poverty and spend multiple years living in poor families have worse adult outcomes than their counterparts in higher-income families.

A recent report from the Annie E. Casey Foundation revealed that, “over the last decade there has been a significant decline in economic well-being for low income children and families. The official child poverty rate, which is a conservative measure of economic hardship, increased 18 percent between 2000 and 2009, essentially returning to the same level as the early 1990s. This increase means that 2.4 million more children are living below the federal poverty line.” 

These statistics and others illustrate the ongoing need for presidential candidates, other politicians, the media, social service providers, and everyone else, to stay focused on this issue and work to alleviate poverty in the United States.

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