Yesterday I was honored to be on a call with America's leading mayors and the US Conference of Mayors to talk about a huge problem affecting cities from coast to coast: the foreclosure crisis.
I've been talking about how a family is losing their home every 13 seconds for awhile now and the recent failure by Congress to enact bankruptcy reform to protect homeowners because of industry pressure was a real blow to stopping that clock.
But the failure in Washington isn't going to stand in the way of ACORN's push to address the crisis at the heart of the economic meltdown and teaming up with some of the leading mayors in the United States is a major way we're moving forward to help families stay in their homes.
Let's set the record straight about one thing -- mayors and ACORN tried to stop this crisis before it began, only to be preempted by federal regulators who did the industry's bidding, and now we are left to clean up the mess. It took the election of Barack Obama for the federal government to start helping families, but even his excellent Making Home Affordable program only aims to prevent 3 to 4 million foreclosures out of the expected 9 million over the next four years.
So it's up to us -- regular folks, community organizations, and local community leaders. We cannot sit on the sidelines while 5 to 6 million families lose their homes.
Luckily there is a tremendously successful model already in existence in the city of Philadelphia. Called "mandatory mediation" it is based on one simple technique: having borrowers and lenders sit down and talk. The success rate is astounding. As we have shown in our recent report, "Road to Rescue: How the Philadelphia Model Can Reduce Foreclosures Across the Country", fully 78 percent of homeowners who have participated in mediation are still in their homes today. 78 percent! Imagine if we could replicate that across the nation!
The Philadelphia program works because it incorporates four pillars: (1) It is mandatory. (2) It involves extensive community outreach to struggling borrowers. (3) It has an easy threshold for participation. (4) It makes use of housing counselors to ensure affordability of workouts.
On yesterday's call, we heard from Philadelphia Mayor Michael Nutter, whose office now coordinates this highly effective program. He has raised money from the private sector to join city funds, but he needs more help, including from the federal government, especially as the foreclosure crisis lays at the heart of our recession.
President Obama himself understands this, and in his February speech laying out the foreclosure plan, said, "We are going to award $2 billion in competitive grants to communities that are bringing together stakeholders and testing new and innovative ways to prevent foreclosures. Communities have shown a lot of initiative, taking responsibility for this crisis when many others have not. Supporting these neighborhood efforts is exactly what we should be doing."
Unfortunately, no such support for local foreclosure prevention yet exists. ACORN will join mayors in fighting to make sure the federal government does as President Obama promised and funds these initiatives. Despite a recent unanimous Senate vote on an amendment offered by Senators Casey and Gillibrand to open up some of the Neighborhood Stabilization Program funds for foreclosure prevention, rather than just buying properties after they're foreclosed, the amendment died in the House.
Across the country, ACORN Housing counselors are waging daily battles just to get reasonable modifications and save homes, but the industry is still foreclosing on hundreds of thousands of families that could be helped but don't live in a city with a mediation program. The efforts of mayors and ACORN to facilitate more affordable loan modifications will be critical in halting the national housing and economic downfall.
Mayor Bloomberg is joining us in pressuring Albany to improve the state's mediation law, Mayors Villaraigosa and Dellums are working with us to get needed changes out of Sacramento, and Mayors Slay (St. Louis) and Diaz (Miami) also committed to working with us locally, statewide, and nationally to help save homes.
With millions more foreclosures staring us in the face, we have to act now to create sensible local solutions that will improve our communities, safeguard families, stabilize tax bases, and revive the economy. With leading mayors stepping up yesterday, we're starting to get the ball rolling.