Marchers in 50 Cities Call for Changes to Help Millions of Americans Keep Their Homes

Date: Monday, December 10, 2007
By: Sherrel Wheeler Stewart, BlackAmericaWeb.com

Last week, President George Bush unveiled a proposal to address some of the problems attributing to the crisis, but Jackson said that plan does not do enough. The plan would call for a freeze in interest rates on some subprime mortgage loans, provided that the borrowers got a subprime, adjustable rate between Jan. 1, 2005 and July 31, 2007 and their annual interest would reset between Jan. 1, 2008 and July 31, 2010.

“Under his plan, you have to be current on your mortgage payment. Those in serious trouble are not current. They are the ones who need help,” Jackson said. “Bush’s plan would help about 15 percent of the people currently at risk of losing their homes.”

Initially, the intent of the subprime program was to make homeownership available to people who did not have access to lenders, said Sharon Reuss, a spokeswoman for the Center for Responsible Lending. Most of those who are facing problems today with the subprime crisis are people who have refinanced. Only about 10 percent are the result of home purchases, she said.

A disproportionate number of those at risk of losing their homes because of the crisis are black or brown, she said.
 
“In 2006, 52 percent of the people closing on loans with sub prime rates were African-American," Reuss told BlackAmericaWeb.com. When those rates began to reset is when people find it difficult to make the payments.

Another problem in mortgage industry, Reuss said, is the disparity in interest rates for black and brown people.

“We did a study that showed African-Americans are more likely to get a higher interest rate than whites with the same credit score,” she said.

Reuss said blacks and Hispanics are often the target of aggressive marketing plans designed to steer them into loans, often for refinancing debt, with an initial lower rate that grows as the years progress.

The solution for the problem will require Congressional action, Jackson said.

“We want Congress to act to protect homeowners and consumers and not just protect Wall Street by bailing out the financial institutions,” he said, adding that 2 million homes nationwide will be at risk of foreclosure by 2008.

In recent months, Jackson has toured at least three states to investigate first hand what he calls “schemes and unfair practices that have gouged many hard-working Americans.” He also has met with Federal Reserve Chairman Ben Bernanke and leaders from Congress to discuss proposals to help homeowners struggling with mortgages they can't afford and to press for relief.

Leaders of the Association of Community Organizations for Reform Now also called for additional relief for those hit hard by the mortgage crisis. In addition to a one-year moratorium on foreclosures, ACORN wants to have implemented a standard, no-less-than, five-year freeze on the introductory rates of borrower’s current on their loans.

“The country needs bold policy initiatives that will meet head-on the crisis we currently face," said Maude Hurd, national ACORN president. She called Bush’s plan “one of those thin-strip Band-aids being put over a sliced artery."

“It fails to address the millions who have defaulted on loans and are facing foreclosure,” she said.

Here’s a look at what RealtyTrac reported in the September 2007 Foreclosure Market Report for the top 11 states with foreclosures:

• Nevada reported 5,504 foreclosures in September, up 187 percent from September 2006 and one foreclosure filing for every 185 households.
• Florida reported 33,354 foreclosures in September, up 158 percent from September 2006 and one foreclosure filing for every 248 households.
• California reported 51,259 foreclosures in September, up 246 percent from September 2006 and one foreclosure filing for every 253 households.
• Michigan documented a monthly decrease in foreclosure activity for September, however reported over 14,000 foreclosures for the month.
• Arizona reported 8,062 foreclosures in September, up four percent from September 2006 and one foreclosure filing for every 316 households.
• Georgia reported 11,926 foreclosure filings, down 14 percent from the previous month, but still the sixth highest state total.
• Ohio reported 15,709 foreclosures in September, up 131 percent from September 2006 and one foreclosure filing for every 319 households.
• Colorado reported 6,290 foreclosures in September, up 246 percent from September 2006 and one foreclosure filing for every 326 households.
• Texas documented a monthly decrease in foreclosure activity for September, however reported over 14,000 foreclosures for the month.
• Indiana reported 4,430 foreclosures in September, up 11 percent from September 2006 and one foreclosure filing for every 615 households.
• Illinois reported 8,257 foreclosures in September, up 33 percent from September 2006 and has documented a month-to-month increase in foreclosure activity for the past year.