CIVIL RIGHTS ORGANIZATIONS HAIL OBAMA ADMINISTRATION’S CREATION OF FINANCIAL CRIMES TASK FORCE AND STEPS TO HELP HOMEOWNERS
Washington, D.C.—Earlier today, the Obama administration fulfilled a promise made during the State of the Union address, announcing the creation of a new financial crimes task force to investigate those responsible for misconduct contributing to the financial crisis. NCLR (National Council of La Raza), NAACP, National CAPACD (National Coalition for Asian Pacific American Community Development), and the National Urban League (NUL) applaud the administration for taking a strong stand in the name of banking accountability.
“Today the administration made a major move in helping American homeowners, especially Latino and other minority families,” said Janet Murguía, NCLR President and CEO. “The housing crisis must be resolved not only for the sake of these hardworking families, but also because the full recovery of our economy depends on it. We believe that steps such as creating the financial crimes task force, enhancing the HAMP program, and pushing Fannie Mae and Freddie Mac to offer principal reductions to underwater homeowners will go a long way toward providing much-needed relief.”
Numerous studies indicate that communities of color are disproportionately targeted with abusive and expensive mortgages, even when adjusting for factors such as income and credit score, compared to their White counterparts. As a result, communities of color are losing their homes at record rates.
“The damaging impacts of the housing and economic crisis continue to permeate Asian American and Pacific Islander communities across the country,” said Lisa Hasegawa, National CAPACD Executive Director. “The administration’s actions today are a step forward in bringing justice to the many families who have lost their financial security because of predatory practices that explicitly targeted AAPIs and other communities of color.”
The Residential Mortgage-Backed Securities Working Group will be chaired by New York Attorney General Eric T. Schneiderman, who has a strong record of defending homeowners against unfair lending practices and fraud.
“The economic collapse and foreclosure crisis overwhelmingly impacted communities of color,” said Marc H. Morial, President and CEO of the National Urban League. “The administration’s decision is significant not only because it will bring those who brought about the devastation to justice, but also because it will help to restore America’s faith in our financial institutions and systems.”
In addition, the administration announced important changes to the Home Affordable Modification Program (HAMP), including more incentives for mortgage servicers to provide principal reduction to underwater homeowners and extending those incentives to Fannie Mae and Freddie Mac. Both the Financial Crimes Task Force and these important changes to HAMP will work in tandem to hold banks accountable and provide more resources to families.
“The NAACP commends the administration for taking these concrete steps to seriously tackle financial crimes against American families and the foreclosure crisis,” said Hilary O. Shelton, the Director of the NAACP Washington Bureau and the Senior VP for Advocacy and Policy. “Given the disproportionate number of racial and ethnic minority families who are facing home foreclosure due to decades of targeting by predatory lenders and their nefarious tactics—including balloon payments, early payment penalties and hidden fees, as well as steering qualified borrowers into unnecessarily high-cost loans that could not be sustained—this new enforcement task force is a welcome action to give some recourse to Americans struggling because of these insidious predatory lending practices.”
National CAPACD’s mission is to be a powerful voice for the unique community development needs of AAPI communities and to strengthen the capacity of community-based organizations to create neighborhoods of hope and opportunity.