On Martin Luther King, Jr.'s birthday, we commonly remember the great civil rights leader's struggle to peacefully end segregation, but the King commemorations often fail to mention another key part of his legacy. That's why, on January 13, I joined a group of homeowners, elected officials and community advocates to call attention to another part of Dr. King's dream that is in grave danger.
Dr. King understood that economic justice was a crucial part of his fight for civil rights. He called upon us to remain, "dissatisfied until those that live on the outskirts of hope are brought into the metropolis of daily security.
Today, the foreclosure crisis is driving millions of Americans from security to despair, and the toll is falling most heavily on communities of color. We watch with horror as communities are losing wealth by the billions and are forced to flee the communities they have lived in
On the very same day as our protest and press conference, new figures showed a record number of foreclosures nationwide in 2010, with an expected 20 percent increase this year. One million homes were seized last year, with a total of 2.9 million at some point in the foreclosure process. These numbers are getting worse, not better.
In California, where I live, the vast majority of foreclosures have occurred in communities of color. In fact, two thirds of all foreclosures in California have been among African American, Hispanic, and Asian borrowers. The disproportionate loss of home equity among households of color will have a huge impact on the wealth gap. Before the recession, households of color owned 16 cents for every dollar held by white families--this disparity is only sure to get worse. Of course, the foreclosure crisis is more than numbers--it's broken dreams, devastated families, and ruptured communities.
The stories we heard Thursday underlined how many of these homeowners got in trouble through little or no fault of their own. For example, we heard from Karina Orocio, whose parents -- who don't read English -- were tricked into refinancing their 30-year fixed mortgage with an adjustable mortgage whose rate and payments exploded, causing them to lose their home. And we heard from Jed Riffe, whose wife lost her job two years ago, cutting the family's income in half and forcing them to burn through their savings in a desperate attempt to save the house. Ironically, they're being told they can't qualify for a loan modification for two reasons: His wife's unemployment, and the fact that so far they've managed to make their payments!
This is crazy, but it's a problem that can be solved. However, that will happen only if government and the financial industry have the will to solve it.
On Jan. 13 we called for four actions, none of them new ideas:
1) Make principal reduction the hallmark of loan modifications for homeowners who are in danger of foreclosure, and make such modifications available to all who need them.
2) Ensure that any borrower who is in the middle of a loan modification will not receive a foreclosure notice while that modification is pending.
3) Increase support for resource-strapped, community-based foreclosure prevention counselors to ensure that such assistance is available for all who need it.
4) Ensure that utilities will not be shut off for tenants renting units in buildings that are being foreclosed.
But, as Jed Riffe said to the crowd, "Is anybody listening?"