Banks, Regulators, Consumer Advocates Address Foreclosure - Black Enterprise

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Black Enterprise Magazine September/October 2018 Issue

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0115_bairFDIC Chairwoman Sheila C. Bair addresses the 12th Annual Wall Street Project Economic Summit (Source: Karl Crutchfield)

While some worry about the 25 bank failures which occurred in 2008 due to toxic subprime loans and an unsolvable credit market, others know that when the dust settles, African Americans would have lost more money to foreclosures during this economic tsunami than during any other time in history.

“We have to fix housing first to put us on the path to economic recovery,” said Sheila C. Bair, chair of the Federal Deposit Insurance Corp. at a luncheon today sponsored by the Rainbow PUSH Coalition.

Michael D. Mitchell, the vice president of fair lending for the National Community Reinvestment Coalition said during a PUSH workshop that fixing the problem will require greater access to capital for African Americans who oftentimes were excluded from prime loans ands steered into subprime loans.

“The solution to exclusion is not to come up with a system that is going to penalize, extract wealth and extract equity from people. It is to allow everybody to get the fundamental right to prime like capital for mortgage financing,” said Mitchell.

The workshop, Wall Street and Main Street Solutions to the Foreclosure Tsunami, and luncheon was part of the 12th Annual Rainbow PUSH Wall Street Project Economic Summit, which ends Friday in New York.

Solutions to the foreclosure dilemma seem to escape many as the problem gets worse with each passing month. During the third quarter of 2008, 171 institutions were on the FDIC’s guarded watch list of troubled banks, said Sandra L. Thompson, director of the FDIC’s division of supervision and consumer protection.

However, failure may have put IndyMac Federal Bank, which imploded, back on the right track. When IndyMac went down it was inherited by the FDIC. The IndyMac model for troubled mortgages, created by the FDIC, has helped homeowners complete sustainable and affordable loan modifications. Last year they sent letters out to 240,000 borrowers about their services, and modified 8,500 loans using a combination of methods including extended amortization, principal forbearance, and several streamlined approaches to try to bring the borrowers’ loans to within 38% of gross income.

“We think that similar approaches need to be applied in a broader industry-wide scale,” says Thompson. The FDIC program called “Mod in a Box” provides a framework for implementing similar programs at other institutions. It outlines FDIC program terms at IndyMac and offers insight into the specific portfolio characteristics that drive modification modeling at that bank.

Unfortunately, homeowners are sometimes too ashamed to ask for help. Bank of America has been doing everything in their power to let homeowners know that their company is offering foreclosure relief. In some cases they have offered three to six month forbearance packages, which temporarily relieve homeowners of payments.

“Get in touch with your servicer or contact a counseling agency. If you contact the servicer and explain the hardship that caused a homeowner to get behind then they will be

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Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, SocialWayne.com chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining BlackEnterprise.com as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and BlackEnterprise.com helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.


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