Today, National People’s Action, a network of grassroots community groups from around the country, is organizing a gathering outside the Department of Treasury to demands that Secretary Geithner take more action to provide relief to households and communities hardest hit by the foreclosure crisis. Studies have shown that communities of color, which were most aggressively targeted by predatory lenders, continue to suffer most in the current recession. NPA Director George Goehl writes at Huffington Post today: “It is disheartening to say the least, that the member of President Obama’s cabinet with the most power to stand up to big banks has not done more to make them modify loans and prevent foreclosures. As it stands, one can’t help but wonder if Treasury feels the average American is too small to help. NPA has found that less than one-half of one percent of those receiving trial modifications of their loans have transitioned to permanent modifications. Their conclusion: “it is clear that Treasury’s Home Affordable Modification Program (HAMP) is not getting the job done.”
Goehl points to his own hometown of Chicago to make the case. In the first half of 2009, foreclosures are up more than 22% over the previous year. Chicago neighborhoods, across the board, have been hit by the crisis, but some have extreme concentration of foreclosures, with 200 foreclosure filings per square mile (see NPA map above). NPA is making the following demands:
- Punish loan servicers that fail to dramatically increase the number of permanent modifications that they make available;
- Mandate principal reduction as a primary tool to prevent foreclosures, not just as a last resort;
- Make it possible for families to reapply to the program if their economic situations change;
- Make the HAMP process more transparent and implement a true appeals process so families in foreclosure can see how to qualify and have recourse if rejected by their servicer;
- Use a portion of the 50 billion foreclosure prevention allocation to set up a mortgage relief program for unemployed homeowners. This could be modeled on the very successful Homeowner Emergency Mortgage Assistance Program in Pennsylvania.