Final Bill Provides Minimal Protections for Latino Homeowners
OCTOBER 8, 2008 – This past week, MALDEF worked closely with members of the Congressional Hispanic Caucus and leading civil rights organizations on the Wall Street rescue legislation. While issues surrounding bank mergers and corporate failings dominated the news, the impact of the current economic crisis on the Latino community is underreported but strongly felt. That is why, beyond our priority issues of immigration, education, voting rights and the like, it was important for MALDEF to work with others in the civil rights community and urge Congressional leaders to address the needs of working families and homeowners.
Latinos are already feeling the pain of the economic downturn and should not have been overlooked as Congress focused on economic relief. As the Pew Hispanic Center reported earlier this year, Latino unemployment rose from 4.7% in the first quarter of 2007 to 6.5% in the first quarter of the 2008. Since then, the situation facing the community has worsened. According to Department of Labor data released Friday (with more data to be reported this week), Latino unemployment jumped from 5.6% to 7.8% from September 2007 to September 2008, including one quarter (24.9%) of Latinos aged 16 to 19. Financial troubles faced by industries, such as housing construction, and states, like California (now with the third highest unemployment rate, 7.7%, behind Rhode Island and Michigan), affect Latinos especially hard. Furthermore, Latino homeowners, many of whom were targeted with subprime loans and other predatory lending practices, remain at a high risk of foreclosure.
The civil rights community and the Congressional Hispanic Caucus, Congressional Black Caucus and Congressional Asian Pacific American Caucus issued a joint letter urging the inclusion of homeowner protections in the economic recovery legislation. MALDEF, with the National Council of La Raza, League of United Latin American Citizens, Urban League, Asian American Justice Center, Leadership Conference on Civil Rights and others, also issued separate letters to the Senate and House leadership seeking assurances for the following:
- An aggressive and systematic approach to permit parties to modify the terms of loans as a prerequisite to loan purchase by federal agencies. In other words, the taxpayers should not be called upon to acquire a loan unless homeowners and borrowers are afforded relief;
- Restoring the authority of bankruptcy courts to modify loans as a last resort; and
- A mandatory moratorium on foreclosures for the limited period of time before the financial rescue plan takes effect.
While these measures were not included and Congress has adjourned without also extending unemployment benefit eligibility, there are still steps that can and must be taken. For the current mortgage crisis, these steps include holding field hearings to better understand the plight of homeowners nationwide; investing in financial counseling programs for at-risk communities; and establishing an oversight board for this recovery package that takes into account the perspective of minority communities. It will now be left to the 111th Congress to pursue an agenda that protects working families and provides the necessary economic opportunities for Latinos. MALDEF will continue to provide financial counseling programs for community members and advocate in Washington, DC and around the country to ensure that Latinos are not left behind as efforts to respond to the current economic crisis continue.