Dear Friend,

While banks and mortgage lenders get bailed out, families across the
country are increasingly facing the prospect of losing their homes.
There's a new bill in Congress that would help: the Helping Families
Save Their Homes in Bankruptcy Act. It would enable struggling
homeowners to renegotiate the terms of their loans and stay in their
homes.^[1]
It would also go a long way towards stopping the downward spiral in
home values and the destabilization of our economy--which affects us
all.^[2]



Banking industry lobbyists are working hard to kill the bill.^[3]
They refuse to see the role of banks and lenders in creating the crisis
and don't want to share the cost of helping us get out of it. It's
unclear whether the bill will pass, because some senators seem ready to
fall in line with the banking industry.


I've joined ColorOfChange.org in letting my senators and their
colleagues know that I expect them to support the bill. Will you join
me? It only takes a moment:



http://www.colorofchange.org/homes/?id=1768-638906


The housing crisis has been brewing for years, and the root
cause wasn't irresponsible home buyers (as right-wing allies of the
banking industry are trying to argue). The wave of foreclosures we're
seeing today is because of changes to banking rules that let banks and
lenders abandon responsible lending practices in order to make large
short-term profits.^[4]



The financial industry pushed hard to win these changes about ten years
ago, spending billions on lobbyists and campaign contributions to
secure the help of their allies in Congress.^[5,6]
The new rules created huge financial incentives for banks and lenders
to issue as many mortgages as possible. And that's what happened--at
every level of the mortgage industry, there was an insatiable drive to
issue more loans, without regard for the potential consequences.^[7] Many in the industry made a killing, but now huge numbers of people have mortgages that will be impossible for them to repay.



Some people acted irresponsibly and stretched to buy homes they knew
they couldn't afford, enabled by mortgage brokers that often went as
far as falsifying documents to qualify people for loans.^[8]
But many are victims of predatory lending who were lied to and tricked
into taking loans that would inevitably trap them in a downward spiral
of debt, resulting in the loss of their home and everything they put
into it.^[9] Subprime lenders preyed on people with low
incomes who were less likely to have good financial literacy--and they
targeted Black people and other people of color in particular.^[10,11]



A threat to Black America



Foreclosures are affecting all Americans and threatening our country's
economy. But it's a particularly devastating problem for Black folks.
Black and Latino homeowners are more than twice as likely as White
homeowners to face foreclosure as a result of subprime loans, and
foreclosures are projected to affect 10% of recent African-American
mortgage borrowers, compared to about 4% of White borrowers.^[12]



The current foreclosure crisis is rolling back significant gains in
Black wealth acquired over the past 30 years, since Congress passed
laws to reduce redlining and other types of discrimination in the
housing market. And a disproportionate amount of Black wealth is in our
homes. Home equity accounts for 63% of total average net worth for
Black households, as compared to 38.5% of average White net worth.^[13]



A threat to America's economy



While it's important to recognize the huge threat foreclosures pose to
Black people in particular, it's just as important to recognize that
this problem affects all of us. Homeowners who are at no risk of facing
foreclosure could see their home values drop if the epidemic of
foreclosures continues. And the more people who are pushed deeper into
debt, the harder it will be for our economy to recover in general.
Stopping foreclosures is essential to getting the economy back on
track--which means we all have a stake in solving this problem.^[14]



An urgently-needed solution



Congress is considering a plan that could offer real relief by allowing
bankruptcy judges to modify the terms of mortgages during bankruptcy
proceedings. This would help people facing bankruptcy avoid
foreclosure, and it would also create an incentive for banks to
renegotiate with borrowers before it gets to that point.^[15]



The House passed its version of the bill last week. But banking
industry lobbyists are hard at work trying to make sure it doesn't pass
in the Senate.^[16]



We need to put as much pressure as we can on Congress right now. Please
join me by telling your senators to side with the homeowners who are
casualties of this economic crisis, not with the banks that caused the
mess. And when you do, please ask your friends and family to do the
same.



http://www.colorofchange.org/homes/?id=1768-638906



Thank you.



Jim (D-TX)



References



1. http://www.reuters.com/article/topNews/idUSTRE52482F20090305


2. http://online.wsj.com/article/SB123327754670931503.html


3. http://...com/agjok9


4. http://www.msnbc.msn.com/id/3036677/#29604900


5. http://wallstreetwatch.org/soldoutreport.htm


6. http://www.motherjones.com/politics/2008/05/foreclosure-phil


7. http://fightingforourhomes.com/


8. See reference 7.


9. http://www.thenation.com/doc/20080714/wright


10. http://...com/bpanjq


11. http://...com/cvdc4a


12. http://...com/dlvqk3


13. http://...com/4plo96


14. http://www.npr.org/templates/story/story.php?storyId=101611260&sc=emaf


15. http://www.newsweek.com/id/187910


16. See reference 3.



Additional references:



http://fightingforourhomes.com/

http://www.prospect.org/cs/articles?article=the_bubble_economy

http://...com/9xvj58