by Charlene Crowell
For New Pittsburgh Courier

(NNPA)—Before Congress adjourned for its current recess, the U.S. House Committee on Oversight and Government Reform convened a hearing on the still-unfolding foreclosure crisis. Convened by chairman and veteran New York Congressman Edolphus Towns, the March 25 forum sought to examine current foreclosure prevention efforts and what needs to change in the government’s response.

Considering that this committee, the main investigative one for the House, is armed with authority to investigate any federal program and/or any issue with federal policy implications, Towns opened the door to a discussion that could not be timelier for the nation.


According to the Mortgage Brokers Association, at the end of 2009 there were 2.4 million loans in foreclosure with another 2.6 million 90 days or more past due. In addition to those disturbing numbers, the often-quoted Bureau of Labor Statistics figure that posts national unemployment at 9.7 percent does not take into account the number of former full-time workers who are now in part-time positions; others so discouraged that they have given up actively seeking employment; or the 6.3 million unemployed people without work for six months or more.

As unsettling as all of these figures are, John Taylor, the head of the National Community Reinvestment Coalition used a portion of his testimony to speak to the racial divide that permeates even federal efforts to encourage loan servicing companies to modify distressed home loans.

“Given that minority communities were targeted by abusive lenders,” said Taylor, “it would seem that federally-supported modification programs should go to extra lengths to ensure equitable access to modifications for all applicants they qualify.”

Armed with findings from a new NCRC survey distributed to 76 organizations in 45 cities, Taylor told the committee how the Home Affordable Modification Program, administered by the Department of Treasury, was falling far short of reaching distressed homeowners, despite its intention to spur sustainable loan modifications. In the first year of the program, HAMP offered struggling homeowners nearly 1.35 million trial modifications; but only 12.5 percent or 170,207 have been converted into permanent modifications.

Most importantly, loan servicers were found to foreclose upon delinquent African-American borrowers more quickly than White or Hispanic borrowers. Among African-American homeowners surveyed, 75 percent found themselves in a foreclosure process after being delinquent on their mortgages for only four months or less. By comparison, 75 percent of White borrowers were in foreclosure after being delinquent for as long as seven months. Troubled Black homeowners had less than a one in four chance of receiving a HAMP home loan modification, while Whites received modifications at nearly 50 percent.

Job loss or reduction in work hours were the two reasons that 76.5 percent of the survey respondents had mortgage problems. According to Julia Gordon, senior counsel for the Center for Responsible Lending, who also testified, the latest HAMP data report shows that 57 percent of those seeking a HAMP modification have experienced a loss of income. She urged policymakers to add capacity to HAMP so that it can assist those unemployed homeowners who cannot demonstrate the nine months of unemployment benefits necessary to qualify for a HAMP modification, yet who would ultimately be successful long-term homeowners.

The average age of NCRC respondents was over 50. So at a time when many older workers historically would be pre-occupied with retirement plans and a different phase of life, far fewer of today’s older workers have that option. With upside-down mortgages—owing more than the home is worth and less opportunity for loan modifications, many who thought they had earned a right to retire will feel fortunate just to continue working in tarnished “golden years.”

In his closing remarks to the congressional committee, Taylor underscored the urgent need to act decisively.

“The nation is currently experiencing the worst recession since the Great Depression. Dire economic times require bold leadership from the public and private sectors,” said Taylor. “Future crises must be averted by Congress enacting financial regulatory reform that includes Community Reinvestment Act  modernization, a comprehensive anti-predatory lending law and a strong and independent Consumer Finance Protection Agency.

(Charlene Crowell is the Center for Responsible Lending’s communications manager for State Policy and Outreach. She can be reached at

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