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State Responses to the Foreclosure Crisis. The National Hispanic Caucus of State Legislators Housing Symposium Graciela Aponte Wealth-Building Legislative Analyst National Council of La Raza. National Council of La Raza. The National Council of La Raza (NCLR)—the largest

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state responses to the foreclosure crisis

State Responses to the Foreclosure Crisis

The National Hispanic Caucus of State Legislators

Housing Symposium

Graciela Aponte

Wealth-Building Legislative Analyst

National Council of La Raza

national council of la raza
National Council of La Raza

The National Council of La Raza (NCLR)—the largest

national Hispanic civil rights and advocacy

organization in the United States—works to improve

opportunities for Hispanic Americans.

Through its network of nearly 300 affiliated community-

based organizations, NCLR reaches millions of

Hispanics each year in 37 states, Puerto Rico, and the

District of Columbia.

nclr homeownership network nhn
NCLR Homeownership Network (NHN)
  • The network includes 50 community-based housing counseling agencies in 23 states.
  • NHN organizations serve more than 30,000 families. Last year, more than 3,000 of those families became homeowners.
  • NHN organizations have provided foreclosure counseling to more than 5,000 families since October 2007.
overview
Overview
  • Barriers to Accessing Prime Products
  • Foreclosures in the Latino Community
  • Impact of Foreclosures on States
  • NCLR Home Rescue Campaign
  • Case Study: Ohio Foreclosure Prevention Task Force
  • Recommendations
  • NCLR Publications
barriers to accessing prime products
Barriers to Accessing Prime Products

Informational challenges

  • Lack of homebuyer and consumer information
  • Product complexity
  • Predatory lending

Systemic challenges

  • Credit scoring
  • Automated underwriting
  • Referral systems
  • Compensation
foreclosures in the latino community
Foreclosures in the Latino Community

As a result, borrowers face a number of

consequences:

  • Abusive lending practices
  • Foreclosure
  • Loss of wealth
foreclosures in the latino community1
Foreclosures in the Latino Community
  • Of the loans made to Latinos in 2005 and 2006, one in 12 will end in foreclosure.
  • 1.8 million foreclosures overall are predicted for 2008 alone.
  • The height of the crisis for Latinos will not come until 2009–2010, when Option ARMs and interest-only loans are scheduled to reset.
impact of foreclosures on states
Impact of Foreclosures on States

Top States Facing Declines in House Values and Local Tax Bases Due to Subprime Foreclosures

Source: Keith Ernst, Wei Li, and Ellen Schloemer, Subprime Spillover (Washington, DC: Center for Responsible Lending, 2007).

nclr home rescue campaign
NCLR Home Rescue Campaign

NCLR launched the Home Rescue Campaign to help

community-based organizations and Affiliates address

the rising rates of foreclosures. The campaign

features:

  • Grant funding for foreclosure prevention counseling
  • A Home Rescue fair pilot program
  • An NCLR Toolkit—Community Responses to the Foreclosure Crisis
community responses to the foreclosure crisis an nclr tool kit
Community Responses to the Foreclosure Crisis: An NCLR Tool Kit

NCLR hosted a working meeting with national

organizations, service providers, industry

professionals, and funders.

  • Participants identified gaps in services and tools that community groups needed to better serve their clients.
  • Innovative outreach and service strategies were reviewed.
  • Recommendations were formulated.
community responses to the foreclosure crisis an nclr tool kit1
Community Responses to the Foreclosure Crisis: An NCLR Tool Kit
  • Community Responses to the Foreclosure Crisis was created to provide community organizations with tools and strategies that could be implemented immediately and without new funding.
  • Any local organization, church, or district office can use this tool kit to develop its own response to foreclosures in your area.
tool kit contents
Tool Kit Contents
  • Getting Started
  • First Responder
  • Community Collaborator
  • Direct Service Provider
  • Advocacy
getting started
Getting Started

Know Your Community

  • Identify community leaders, service providers, and existing community responses.
  • Understand the experiences and needs of foreclosure victims.
  • Identify gaps in service.

Build Community Awareness

  • Contact reporters from local media that cover housing or community programs
  • Create a Public Service Announcement (PSA).
  • Talk to your community leaders.
first responder
First Responder

Know Your Strengths

  • Understand the needs of clients, list and prioritize them.
  • Decide what you can contribute.

Create Your Network

  • Get involved in a local coalition, working group, or task force.
  • Ensure that the local network meets your clients’ needs.
  • Offer your services.
  • Identify who is missing.
  • Develop a referral network.
community collaborator
Community Collaborator

Who is a Community Collaborator?

  • A community collaborator is a community leader, community-based organization, local government agency, public official, or community partnership that can organize outreach events for the community.

What is a Home Rescue fair?

  • A Home Rescue fair is an outreach event that provides pro bono legal advice, housing counseling, and loan negotiation to assist families who are struggling with their mortgage payments identify resources and assistance.
direct service provider
Direct Service Provider

Foreclosure Prevention Counseling—Housing Counselor Will:

  • Review financial information
  • Discuss foreclosure prevention options
  • Work with family to submit a budget, hardship letter, and a request for a loan modification, deed-in-lieu, or forbearance to the lender
  • Follow up with lender and family
advocacy
Advocacy

Types of Advocacy

  • Administrative
  • Service
  • Legislative

Examples of Advocacy Activities

  • Contact elected officials
  • Testify at public hearings
  • Write a letter to the editor
  • Organize a rally
case study ohio foreclosure prevention task force
Case Study: Ohio Foreclosure Prevention Task Force

Homes on the Hill Community Development

Corporation, an NHN member, participated in the task

force that helped Ohio develop and enhance its

foreclosure prevention programs by:

  • Demanding more flexible underwriting requirements so that more families can qualify for state refinancing programs and avoid foreclosure
  • Conducting Borrower Outreach Days to facilitate communication between borrowers and lenders
case study ohio foreclosure prevention task force1
Case Study: Ohio Foreclosure Prevention Task Force

(continued)

  • Recruiting more than 1,000 attorneys to provide free legal assistance to families
  • Establishing a state hotline that families can call to connect with a pro bono attorney
  • Creating a new public awareness campaign, Save the Dream, to link Ohioans with local, state, and federal foreclosure prevention resources
case study ohio foreclosure prevention task force2
Case Study: Ohio Foreclosure Prevention Task Force

The task force included representation from local,

state, and federal governments; lenders; and nonprofit

organizations. The task force offered 27

recommendations grouped into the following

categories:

  • Encouraging borrowers to get help early
  • Expanding housing counseling and intervention services
  • Working with lenders and servicers to maximize alternatives to foreclosure
recommendations
Recommendations

Priorities for the Latino community

  • Require loan servicers to provide loss mitigation to struggling homeowners.
  • Defer foreclosures while families are in the loss mitigation process.
  • Provide protections for renters and victims of predatory lending.
  • Offer assistance to families facing homelessness due to foreclosure.
  • Increase resources for local foreclosure programs and funding to develop and return abandoned homes to the affordable rental and sale markets.
case study ohio foreclosure prevention task force3
Case Study: Ohio Foreclosure Prevention Task Force

(continued)

  • Provide options for homeowners to refinance or restructure their mortgages.
  • Improve Ohio\'s foreclosure process.
  • Strengthen protections for homeowners.
  • Help communities recover from the aftermath of foreclosures.
nclr publications
NCLR Publications
  • Community Responses to the Foreclosure Crisis: An NCLR Tool Kit
  • Saving Homes, Saving Communities: Latino Brokers Speak Out on Hispanic Homeownership
  • American Dream to American Reality: Creating a Fair Housing System that Works for Latinos
  • Jeopardizing Hispanic Homeownership: Predatory Practices in the Homebuying Market
  • Increasing Hispanic Homeownership: Strategies for Programs and Public Policy

For a complete list of publications, congressional testimony, and

regulatory commentary, visit www.nclr.org/wealthbuilding.

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