The immediate question is now that Bank of America has put the brakes on home foreclosures will other banks and financial institutions follow its lead? Representatives from national civil rights groups across the country are not sitting on their fannies waiting to see that happen-they’re pressing for that to happen immediately.
Organizations such as the Leadership Conference on Civil and Human Rights, the National Fair Housing Alliance, National Council of La Raza, the NAACP, and the Center for Responsible Lending are renewing their April 2007 call to institute an immediate national moratorium on foreclosures. Until lenders demonstrate that they are adhering to all existing laws, regulations, and contractual guidelines related to loss mitigation and foreclosure legal process, lenders in all 50 states should not move forward with any foreclosures, according to the organizations.
Lender abuse, fraud, the increase in crime rates in neighborhoods where minorities make up the majority and the misrepresentation in foreclosure filings are among the numerous reasons why these civil rights groups want to see the stoppage of home foreclosures.
According to recent research by the Center for Responsible Lending, African-American and Latino borrowers are 75% more likely than their White counterparts to experience foreclosure. Moreover, the higher the concentration of racial minorities in a community, the higher the rates of foreclosure.
“The problem of foreclosure fraud with lenders’ wrongfully manipulating essential data was entirely foreseeable,” said Wade Henderson, president and CEO of the Leadership Conference on Civil Rights. “Several years ago we urged Congress to make a simple change to bankruptcy laws that could have kept countless families in their homes. If we don’t take drastic measures now, we can expect millions of additional foreclosures in the coming years, with a disproportionate number of them involving Latino and African-American families.”
Leaders of these organizations want to see a congressional inquiry and a national moratorium on home foreclosures.
“The foreclosure crisis has decimated American neighborhoods across our nation, and it has had a disproportionate effect on racial and ethnic minority families,” said Hilary Shelton, director of the NAACP Washington Bureau. “Experts and scholars now project that it will take decades for communities of color to recover from the crisis. Racial and ethnic minority Americans have historically been the hardest hit by economic crises and that is certainly true today. The civil rights community warned the nation three years ago that if nothing was done to intervene that the crisis would impose the greatest loss of wealth ever experienced by the African-American and Latino communities. Sadly, this is being borne out.”
Shanna L. Smith, president & CEO of the National Fair Housing Alliance, compares the national foreclosure crisis to having a standard set of rules to one group of people to another set for minorities.
“We can draw a direct line from the history and patterns of segregation in America to the disproportionate effects of this crisis on communities of color,” Smith said. “For decades, we have asked lenders to provide fair and affordable credit to underserved communities. Instead, these communities were deluged with toxic credit and we’re experiencing the fallout today. Our call for a national moratorium on risky subprime loans went unheeded three years ago. In the intervening time, most attempts to mitigate foreclosures have proven to be unsuccessful while more and more people defaulted on loans. We hope that our call for a national halt on all foreclosures will be implemented today.”