Financial Products
The foreclosure crisis was spurred by the proliferation of higher-cost and high risk financing that was often targeted to borrowers and communities of color. These borrowers and neighborhoods have been disproportionately impacted by foreclosures and will need access to loan modifications and affordable mortgage loans if they are to stabilize and participate in any type of economic recovery.
In order to avoid as many foreclosures as possible, the Home Affordable Modification Program (HAMP) and other federal foreclosure prevention programs must be made more efficient and expand their criteria to more effectively offer loan modifications to unemployed and underwater homeowners. The program has also suffered from slow implementation and a failure by servicers to quickly convert trial modifications into permanent modifications.
Additionally, neighborhoods need new home buyers to fill the holes left behind by foreclosure. However, demand is weak and credit for home purchasing is scarce, especially in the communities hardest hit by the crisis. Prospective home buyers need creative and sustainable loan products designed with current market realities in mind, such as down payment assistance, and housing counseling to help them buy and keep a home they can afford. Non-profit lenders such as Neighborhood Housing Services (NHS) of Chicago understand communities and specialize in making affordable loans. However, they need public and private leverage to expand their ability to lend to the broader Chicago region. Additionally, there is a need for banks to return to the hardest hit markets and make safe and affordable mortgages.
This page details the efforts of RHOPI partners to advocate for improvements to local and national foreclosure prevention programs and to expand access to mortgage credit for prospective homebuyers in communities hit hard by the foreclosure crisis.
The Community Reinvestment Act (CRA) has been an effective tool that has been used over the past 30 years to ensure that banks are meeting all the credit needs of the communities they serve, particularly low- and moderate-income (LMI) communities. It has been used to improve access to low-cost mortgage credit in underserved...
The Obama Administration announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs. Through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund), the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for...
According to a report issued by the State Foreclosure Prevention Working Group, increased use of loan modifications...
One year after the announcement of the Home Affordable Modification Program (HAMP) to help homeowners struggling with mortgage payments, the Special Inspector General for the Troubled Assets Relief Program (SIGTARP) released an audit of HAMP's effectiveness based on concerns about results which are, according to Treasury and others, "disappointing....
A report released by a multi-state collaboration of regional research, policy and advocacy organizations documents the dramatic decrease in low-cost home loans made between 2006 and 2008, and highlights that communities of color were hardest hit by the drop-off in lending.
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A housing counseling agency that’s so swamped with demand for foreclosure prevention counseling that its executive director personally handles clients. Stalled real estate markets where buyers are waiting for prices to drop even further, and buyers who do want to buy now are struggling to obtain financing. Scam artists who take off with troubled homeowners’ last...
As the foreclosure crisis has escalated over the past year, families and communities throughout the Chicago region have been greatly impacted, and
housing counseling agencies have been inundated with foreclosure cases. Foreclosure filings in 2010 will likely remain at historic highs in part due to
continuing high unemployment rates and to the resetting of adjustable rate...
Attorney General Lisa Madigan announced that she has filed a lawsuit against Countrywide, a subsidiary of Bank of America, for unlawfully discriminating against African American and Latino borrowers in home mortgage sales, in violation of the Illinois Human Rights Act and the Illinois Fairness in Lending Act. The Attorney General filed her complaint in Cook County Circuit Court against...
This report by Woodstock Institute analyzes 2007 Home Mortgage Disclosure Act data and finds that, in low- and moderate-income communities, depositories with CRA obligations originate a far smaller share of higher-cost loans than lenders not subject to CRA. It also finds that lenders covered by CRA are much less likely to make higher-cost...