“On a day when the President is calling for more infrastructure investments to bolster the economy, it should be noted that ongoing foreclosures undermine infrastructure investments and economic recovery. Foreclosures hurt the economy by driving down everyone’s home values, destroying equity, lowering local tax revenue and thereby reducing infrastructure investments and consumer spending. Allowing the foreclosure crisis to continue largely unabated is bad policy, especially since common sense solutions exist that would put an end to unnecessary foreclosures,” said Taylor.
The Administration should immediately pursue efforts to require principal reductions on mortgages. The letter sent to President Obama on Friday noted other steps that could be taken to resolve the foreclosure crisis:
“In closing, we note that the systemic problems in the foreclosure system require a much greater government response than has been taken thus far. There should be a national moratorium on all foreclosures until regulators and other agencies can ensure that mortgage servicers are complying with all applicable laws, regulations, and contractual requirements, and these problems should lead us to renew efforts to find a more effective way to prevent unnecessary foreclosures. Many powerful solutions have been proposed, such as requiring servicers to evaluate homeowners for loan modifications prior to foreclosure, or permitting bankruptcy judges to modify mortgages for a family’s primary home. We hope those solutions can be explored in a serious way to help America’s struggling homeowners, housing market, and the economic recovery.”
The National Community Reinvestment Coalition is assessing the files of clients it has to which it has provided housing counseling, in order to determine if any consumers’ rights have been violated. NCRC is also considering filing ethics complaints against the law firms acting as foreclosure mills in these matters.
The National Community Reinvestment Coalition is an association of more than 600 community-based institutions that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development and vibrant communities for America's working families.
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NCRC Supports Temporary National Moratorium on Foreclosures
Rubber stamp foreclosures continue pattern of disrespect for consumers’ rights and legal process, creating moral hazard for financial services industry
Washington, DC – In a letter to President Obama on Friday, the National Community Reinvestment Coalition joined dozens of other consumer and civil rights
groups in a call for a temporary national moratorium on foreclosures, until an investigation can be completed to determine the extent to which consumers’ rights have been violated by servicers and lenders. NCRC also called on Congress and the Administration to pursue non-voluntary measures to resolve the foreclosure crisis.
“The rights of consumers have been treated as an afterthought by the financial industry,” said John Taylor, president & CEO of the National Community Reinvestment Coalition. “Allowing the industry to rubber stamp foreclosures, and continue with sloppy, extralegal practices promotes a ‘moral hazard’ that encourages abusive behavior. Not intervening to investigate and ensure that consumers are adequately protected in the foreclosure process sends a message that mortgage lending and servicing continues to be the Wild West, wherein the industry is free to do what they want, without consideration for the borrower.”
“We need to end the voluntary reliance on the industry to do the right thing with respect to homeowners. Three years of following this approach on the foreclosure crisis has largely failed. Congress and the Administration should take this opportunity to finally put in place something that puts an end to unnecessary foreclosures, rather than delaying them,” said Taylor.
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