Communities of Color Face Unexpected Foe in Foreclosure Prevention

Millions of Americans are still suffering the effects of the subprime mortgage meltdown. More than four million homeowners have been foreclosed upon already, and nearly 11 million are "underwater," that is, they owe more on their mortgages than their homes are worth. But it's not just these 15 million who are suffering, that number is much larger if you count the children who live in those homes.

Think about what happens to a community where many homes are in foreclosure or where many underwater homeowners don't invest in the upkeep of their homes. Neighbors' homes lose value. Towns and cities spend more on policing, securing, and maintaining neighborhoods full of vacant homes. And, because communities of color were especially targeted for predatory loans during the subprime boom, those communities are suffering disproportionately now. Compounding the problem, many communities of color are not experiencing the recovery that has begun for some.

The federal government hasn't been able to solve this problem yet, so we shouldn't be surprised that some of the hardest-hit local communities are trying to take matters into their own hands. In places like Richmond, California, and Irvington, New Jersey, local governments are talking about using their eminent domain power to keep homeowners in their homes. Those governments could seize underwater mortgages, paying the current mortgage holders fair market value. They could then re-issue the mortgages on fairer terms, lowering homeowners' monthly payments and stabilizing their communities in the process.

You might think the federal government would be excited by this idea, since it's a creative solution where federal programs have struggled. Instead, the Federal Housing Finance Agency (FHFA) issued a statement threatening to take legal action or deny credit to communities that try to use eminent domain to modify mortgages. Strange, right? We thought so, too. When a coalition of community groups filed a Freedom of Information Act (FOIA) request, asking the FHFA for more information about its efforts to block the use of eminent domain for mortgage modification and its communications with the financial industry on that topic, the FHFA never responded.

So, the ACLU and the Center for Popular Democracy today filed a FOIA lawsuit, asking a federal judge to order the FHFA to turn over the information. We think the public deserves to know why the FHFA came out so strongly against Richmond, and Irvington, and the other suffering communities that are interested in experimenting with this solution. If the FHFA really is putting the interests of Wall Street above those of hard-hit communities, we're going to have a hard time getting the housing market back on track.

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The plan is for everyone to lose the homes. They are probably in areas close to transportation and a main city access. They will then move in, get the homes at cheaper prices, renovate and gentrify the neighborhood. Condos, high end boutiques and restaurants will pop up. The original inhabitants will not be able to afford to stay or move back in. The neighborhood won't be "colored" anymore.

from NOT feelin...

Well isn't THAT a lovely "plan." To 'gentrify the neighborhood, provide condos and high end boutiques, the works, only to force the original inhabitants out of their homes and neighborhood.'
I think Ebenezer Scrooge just rolled over in his grave hearing of THAT plan.

They're WORSE than Dickens could have imagined; they sound like their souls were forged in the Fourth Circle of Dante's freakin' HELL. In fact, Dante's version of the Fourth Circle is too GOOD for them.
I hope they have their nuts nailed to a ton weight of ball and chain, that rolls to the pinnacle of a hill and then back down to crash into their private parts (greedy women can have it roll into their chests) for all eternity.

That plan sounds better than theirs. Or better yet, I hope all the women's hair falls out and they look like hags on the outside to match what's on their insides.

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