Business
Impact of Foreclosure Upon Communities of Color
On Friday, February 19, 2016 the New York State Foreclosure Defense Bar (NYSFDB) co-sponsored a Legislative Luncheon at Brooklyn Law School, led by Congresswoman Yvette Clarke (9th Congressional District). The topic of discussion, the “impact of foreclosure upon communities of color”, was buoyed by a recent report issued on January 27, 2016 by Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (TARP)[1]. The report details the impact that the low rate of Home Affordable Modification Program (HAMP) approvals has had on the foreclosure crisis, specifically the impact on Brooklyn communities over the past five years. It found that from 2009 to 2015, nearly half of the TARP funding allocated to support HAMP remains unspent, funding which is set to expire in 2016. In addition to this, in April 2015 approximately three out of four homeowners had their HAMP applications denied, which totals to over four million people nationwide.
As a member of NYSFDB, David Bryan, Director of the Consumer and Economic Advocacy (CEA) Program, attended the luncheon and participated in a panel discussion. Starting with a chant of “Black Homes Matter!”, which the room joined in on, Bryan launched into a narrative of a recent case involving a lender discriminating against clients in the provisions written into their mortgages. Historically, communities of color have been disproportionately impacted by unfavorable mortgage agreements and predatory subprime lending practices, which have led to higher rates of foreclosure, patterns that persist to the present day. The CEA Program team represents clients and helps fight against such discrimination, an increasingly important need given that the vast majority of homeowners facing foreclosure do not have a lawyer. Bryan concluded the discussion by reinforcing that in order to deter financial institutions from taking advantage of homeowners there must be a clear threat of criminal prosecution in place for those that violate the law.
The general consensus from the members of the Legislative Luncheon was very clear: the foreclosure crisis of the Great Recession is not over. Over the next three to five years, close to $10 billion in community and family wealth could be transferred out of Brooklyn as lenders continue to foreclose on homes and seize property. This leads to the threat of displacement for tens of thousands of Brooklynites, which will drastically change the landscape of neighborhoods that have been predominantly minority and working class for many years. With the number of judges handling residential mortgage foreclosure cases in Brooklyn recently reduced from 25 to 2, and the funding designed to support HAMP set to expire in 2016, a joint effort among local lawmakers and civil legal service organizations is imperative to ensure that Brooklyn homeowners are given a fighting chance to remain in their homes. (Brooklyn A’s News)