Lights On: Families Find Hope After Foreclosure Crisis
Black middle class still in need of relief after loss of homes; special aid program ends Dec. 31
By now, it’s no secret that the nation’s economic downturn –- sky-high layoffs, record unemployment and home foreclosures -– has had a disproportionate impact on African American families.
Some even charge that the impact was deliberate, with lenders taking advantage of the financially vulnerable.
Rarely told are the stories of black and brown families who find the light at the end of the foreclosure tunnel, with the help of organizations that want nothing more than to help put them back on solid ground.
““Eligible homeowners can request to have their mortgage file reviewed by a neutral party to see if errors occurred during the foreclosure process,” says Marc Morial, president of the National Urban League and a spokesman for Independent Foreclosure Review Project, which offers free consultations for eligible people who lost their homes to foreclosure. "If an error is found, homeowners may be eligible for compensation or other remedy such as refunded fees, stopping of a foreclosure, or payments that could range from $500 to $125,000, plus equity.”
Anyone who was involved in ANY kind of foreclosure actions in 2009 or 2010, who believes there were mistakes made in their foreclosure process, can apply for a FREE, third party review of their foreclosure files, according to Independent Foreclosure Review officials. If errors are found, homeowners may be eligible for compensation, up to $125,000 plus equity, have a stop put on a foreclosure, or some other remedy.
But there is some urgency: The Independent Foreclosure Review program ENDS Dec. 31, and it’s estimated that 4.5 million people may benefit from the IFR program – but they have to know about it and they MUST apply before Dec. 31.
How can people take advantage? People can find out if they are eligible and also apply for a free, independent review by calling the IFR Hotline at 1-855-778-0855 or go to www.independentforeclosurereview.com.
Why is this necessary? Congress and the 14 banks involved in the foreclosure fiasco of 2009-10, reached a settlement. The IFR program is one result of that settlement and its goal is to help right the wrongs made by the banks during that period. IFR officials say the program provides real, legitimate help for homeowners who were financially injured as a result of the bank’s actions during the 2009-2010 mortgage crisis.
Morial says homeowners should act quickly to find out if they are eligible for compensation or other remedies:
Remedies can't come soon enough for many homeowners. By 2010, when the Great Recession had the country in a chokehold, the black homeownership rate had fallen nearly 6 percentage points to 46.2 percent since reaching its peak in 2004, according to U.S. Census data. Nationally, the rate only fell 2.3 percentage points, with only 4.5 percent of recent white borrowers losing their homes, compared to 8 percent of black borrowers. Latino foreclosures were a close second behind those of blacks.
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The cause, of course, was the boom in homeownership in the early aughts that put almost 7 in 10 Americans in homes – with a good portion of black and Latino homeowners in mortgages with rates that would eventually crush them.
That was Atlanta resident Jermaine Heard’s story. A native of Philadelphia, the 37-year-old, college educated Heard moved south for a job with his wife and two children. He purchased a home using a big name bank’s “interest-only” mortgage that eventually ballooned in two years to include payments on the principal loan.
“It wouldn’t have been a problem if I hadn’t have lost my job [in 2008],” Heard said in a phone interview, adding that he suspected the bank knew he might have a problem affording the higher monthly payments to come.
“It wasn’t the best deal for me at the time. If I could only afford the interest…they approved me for a mortgage that they knew I couldn’t really afford,” Heard said.
The Heard family home was foreclosed on in 2009. They moved out and lived in a hotel for about a month. What got them back in a home, Heard said, was an early decision to keep his and his wife’s finances separate. With his wife’s credit score intact, they were able to purchase a new home. But Heard said he would have looked more closely at the financial particulars of his first mortgage, had he known to ask more questions.
His story isn’t unique. Blacks were 150 percent more likely to get high-cost loans during the housing boom, according to the Center for Responsible Lending, even when they had similar incomes and credit scores to those of white borrowers.
That’s why projects like the Independent Foreclosure Review were launched, she said. While many homeowners -- both whites and members of racial and ethnic minority groups -- lost their homes because they simply could not afford to stay in them, some banks carried out foreclosures that were initiated illegally.
A free review of a foreclosure case often results in compensation for families who were illegally or unethically foreclosed on. Heard said his brother in Philadelphia benefited from a review of his mortgage in a foreclosure, where errors were found in the initial processing of his loan.
The federal government backs many of these foreclosure review programs, including those of the Independent Foreclosure Review. The organization is currently offering free independent reviews for home foreclosure actions that took place in 2009 and 2010.
Another of its spokespersons, Marcia Griffin, who founded HomeFree-USA, a public benefit corporation focused on increasing responsible homeownership, has enjoyed a “remarkable 0 percent foreclosure rate among families that have participated in her … pre- and post- [home] purchase counseling programs.”
For more information about a foreclosure review, visit the IFR’s website.