Chicago—The National Training and Information Center (NTIC) who released a study on Monday documenting new foreclosures in Chicago during the first half of 2007 says that the Bush Administration’s proposal does nothing to help families facing foreclosure right now. According to reports, the plan covers only subprime adjustable rate loans issued from January 2005 to mid 2007 that will reset to higher rates starting next year through 2010. In Chicago alone there were 6,339 foreclosures started in the first half of 2007 (a 42% increase over the same period in 2006) according to the NTIC study. “The Bush/Paulson plan is another drop in a really big bucket. Few, if any, of the families facing foreclosure this holiday season will be helped by this plan,” according to George Goehl, NTIC’s Executive Director.
The Bush/Paulson plan is voluntary for the industry. Lenders and servicers get to decide whether or not they work with families to help them save their homes. “Making this plan voluntary is like asking a crook to turn themselves in. With this meltdown of the subprime market, the mortgage industry has proven that it cannot self-regulate,” said Inez Killingsworth, President, Empowering and Strengthening Ohio’s People, Cleveland. “It is time to get serious about helping homeowners and saving the economy from a further meltdown.
This just redlines everybody who is in trouble right now.” NTIC launched the Save the American Dream campaign (http://www.savetheamericandream.org) earlier this year, calling for immediate relief to keep families in their homes by freezing interest rates on subprime ARMs and modifying loans on owner-occupied homes so they are permanently affordable. The campaign also calls on the President and Congress to expand the Community Reinvestment Act so that all mortgage originators are regulated by the same high standards, as well as comprehensive protections for homeowners and criminal penalties on any broker or lender that knowingly engages in abusive lending practices.
Currently, over 250 activists, industry and government officials are meeting in Chicago at NTIC’s National Housing and Banking Summit to hammer out solutions to the foreclosure crisis. On Friday, December 7, Rev. Jesse Jackson will be joining the summit and echoing the need for immediate action for families in foreclosure now.