News Column

Moving Forward From the Housing Crisis

July 10, 2012

Tovin Lapan

foreclosure

During the four-day National Council of La Raza (NCLR) conference going on at Mandalay Bay, Nev., pressing issues such as immigration reform, access to health care and unemployment have all been addressed.

Yet the one issue that speaks most to the recession's slippery slope, to the compounding problems faced by Latino families, is perhaps the foreclosure crisis.

"A lot of states have been hit hard, and Latinos have been particularly hit hard," said Janet Murguia, NCLR president. "A lot of Latino families have had a hard time staying in their homes. They lose a job. Then, they lose health insurance. It just becomes a whole snowball effect."

In a speech during the Monday afternoon town hall, "Don't Quit the Dream: A Vision for Homeownership Beyond 2012," Secretary of Housing and Urban Development Shaun Donovan referenced the disproportionate impact the recession has had on Latinos.

"Let's be clear, while this crisis has touched the lives of every family, with 1.3 million Latino families having lost their homes, the Latino community has been harder hit than anyone," Donovan said, also citing data that indicates blacks and Latinos are twice as likely to have faced foreclosure during the recession than other groups. "To anyone who cares about an equitable, fair and inclusive America, those statistics aren't just troubling, they're completely unacceptable."

Donovan said the $25 billion settlement reached in February with the largest private mortgage servicers, which includes new guidelines for mortgage lending taking effect in October, will help eliminate unlawful foreclosures and spur refinancing.

Nevada Attorney General Catherine Cortez Masto introduced the town hall panel, and did not fail to mention why this is such a critical issue in the Silver State, which led the nation in foreclosure rate for 62 straight months during the recession.

"To understand what's happening here you literally just have to drive around our communities, and see what's happening in our neighborhoods," she said. "It's been devastating here in Nevada, but it's been devastating across the country."

Richard Cordray, director of the newly created Consumer Financial Protection Bureau, joined the panel and outlined his strategy for protecting borrowers.

"I'm here today to say to the mortgage market 'No Mas.' No more costs and risks buried in the fine print that do not become clear until it's too late," he said. "No more mortgages designed to fail, mortgages that benefit originators but not borrowers. No more last-minute shocks at the closing table that leave consumers stuck with fees they did not know about or plan for. And, no more costly surprises and runarounds from mortgage services that leave people with no where to turn when they need help the most."

Maria Cabildo, president of the East LA Community Corporation, which provides counseling to homeowners, also was on the panel to share what she sees at the street level.

"We met every program that is rolled out to help homeowners with enthusiasm, but were only deeply disappointed," she said. "Instead of solutions we've seen lost paperwork, unexplained denials, misinformation from servicers, all leading to unlawful foreclosures. It's been a very, very tough five years."

Cabildo said people drove over 60 miles to visit the community organization because there were no Spanish-language services in their area.

On that front, Donovan had welcome news. The housing secretary announced a revamped Spanish-language website, where information on mortgages, refinancing, counseling, scams and other housing issues is available.

During the question-and-answer period, many of those in attendance asked about penalties and regulations for attorneys and others who took advantage of underwater homeowners.

Margarita Rebollal, executive director for Community Services of Nevada, said she knew one man who gave more than $9,000 to attorneys, received little in return and still lost his home.

"Who is monitoring the attorneys?" she asked.

Cordary said scams like the one Rebollal described are "as low as you can get," and mentioned that while attorneys are generally exempt from his bureau's oversight, those lawyers who offer financial services such as loan modifications are under his jurisdiction.

Donovan also said his department's inspector general can investigate those types of fraud, and "make sure that the last hope these families have is not taken away."



Source: (c)2012 the Las Vegas Sun (Las Vegas, Nev.) Distributed by MCT Information Services


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