National civil rights groups – including the Leadership Conference on Civil and Human Rights, the National Fair Housing Alliance, National Council of La Raza, the NAACP and the Center for Responsible Lending – are renewing their April 2007 call to institute an immediate national moratorium on foreclosures.
Until they demonstrate that they are adhering to all existing laws, lenders in all 50 states should not move forward with any foreclosures, the groups say.
The organizations' push for a moratorium is the latest example of public outcry against servicers, several of which have reported procedural errors in their foreclosure processes. The civil rights groups join several state attorneys general who have demanded foreclosure freezes.
‘When we first issued our call three years ago, the industry responded by stating that we were crying wolf, that the foreclosure problem would be contained,’ says Michael Calhoun, president and CEO of the Center for Responsible Lending (CRL). ‘They were wrong, and as a result, we have had millions of preventable foreclosures.’
Chase, GMAC/Ally and Bank of America have voluntarily halted foreclosures in judicial states while they review paperwork. GMAC, which was named in a lawsuit by Ohio Attorney General Richard Cordray earlier this week, contends the document errors – affidavits that were signed without affiants having personal knowledge of the facts stated within – have not led to faulty foreclosures.
The civil rights groups say the foreclosure crisis has disproportionately impacted communities of color. According to recent research by the CRL, African-American and Latino borrowers are 75% more likely than their white counterparts to experience foreclosure.
‘Racial and ethnic minority Americans have historically been the hardest hit by economic crises, and that is certainly true today,’ says Hilary Shelton, director of the Washington bureau for the NAACP. ‘The civil rights community warned the nation three years ago that if nothing was done to intervene, that the crisis would impose the greatest loss of wealth ever experienced by the African-American and Latino communities. Sadly, this is being borne out.’
SOURCE: Center for Responsible Lending