Opinion: Finally! Relief for Latino homeowners
Nearly a year and a half after news broke of widespread wrongful foreclosures at the hands of the nation’s five largest mortgage servicers, the federal government, and a coalition of state attorneys general (AG) have reached a solution that will deliver $25 billion in aid.
This is a landmark victory for struggling homeowners who have been waiting desperately for justice, accountability, and meaningful relief. While there is much to celebrate about the settlement, one of the most important parts is that reducing principal loan balances and other compensation will be mandatory. This is the vital ingredient that has been missing from so many other federal programs.
There is widespread agreement that resuscitating the housing market is critical to our broader economic recovery. It is also essential for the micro-economies of individual households and Latino households in particular. Latino families have lost two-thirds of their wealth in the Great Recession, the vast majority of which is due to foreclosure and declining home values. The states where many of our families are concentrated have been among the hardest hit: Florida, Arizona, Nevada, and California.
Most homeowners facing foreclosure find themselves there through no fault of their own. With unemployment among Latinos in the double digits for three years, it is no wonder that home loss has hit the community hard. Adding to the challenge of making a mortgage payment with less income is the fact that many of the loans sold to Latino homeowners were overpriced and unnecessarily risky. In its recent case against Countrywide, the Department of Justice uncovered a practice of steering—pushing creditworthy families into subprime loans to turn a higher profit.
Read the full story at Univision News
Janis Bowdler is the Director of National Council of La Raza’s Wealth-Building Policy Project