Their talk was part of the day-long gathering in which local, state and national fair lending, foreclosure prevention and neighborhood revitalization activists met to discuss strategies to stem the tide of foreclosures and protect neighborhoods. The future, all agreed, is a second wave of the foreclosure crisis due to high statewide unemployment and a national economy that continues to stagnate.
In Cuyahoga County, commercial and residential properties lost to foreclosure are razed each week. Many more properties are left abandoned, becoming magnets for crime and drugs, which lowers remaining property values. Joe Mariano talked about how ESOP has been able to create local leaders, who have created a dialogue with their neighbors and local law enforcement to make their own neighborhoods safer. You can read the original column here , and make comments. It was gross malfeasance and a see-no-evil complicity that supported the onslaught of renegade subprime lending.
Ready compliance with industry agendas made regulators avoid the obvious: Without rigorous CRA enforcement, the voracious and corrupting beast of subprime would devour us all. The intent was to serve low- and moderate-income neighborhoods, never a favored market niche among our banker brethren.
Pretty straightforward idea. And the Feds managed to apply it, albeit in fits and starts, until A legion of predatory lending, liar loans, option ARMs, etc. The outright neglect began in The CRA requires that banks and thrifts be evaluated on how well they serve the credit needs of areas from which they take deposits. In , more than banks nationwide fell into these categories.
By , that number had dropped by 93 percent, to fewer than Without a negative CRA finding, banks can more easily acquire and merge with other banks.
Until it stopped working, the CRA grading system allowed community groups to challenge bank mergers based on redlining and other discriminatory practices — a check and balance that made it more difficult, embarrassing and expensive for banks to neglect lower-income and minority markets.
For evidence supporting these challenges, community groups relied on annual loan data gathered from banks and made public under the Home Mortgage Disclosure Act HMDA. Over time, these challenges fell on deaf ears. Regulators routinely dismissed community-analyzed HMDA evidence as unreliable, incomplete and misleading. The federal regulators systematically ignored the only tool community groups had to gauge bank misconduct — and made it impossible for the CRA to be enforced against transgressing banks.
Mergers were almost never denied by regulators and certainly not because of CRA concerns. But for those inclined to see, the HMDA data became increasingly stark and alarming.
Subprime was on the rise. Banks were walking away from their mortgage business in urban neighborhoods, without accountability under the CRA. Subprime junk rushed into the credit vacuum.
So, what these hearings should be about is why and how this happened. How did our regulators become so utterly co-opted by the lending industry? How did banks, some now insolvent, repeatedly escape the wrath of the CRA? Why were low-income neighborhoods left to fend for themselves against the mortgage predators? Call Our highly experienced counselors will work to ensure that you are financially ready for homeownership.
Learn the important basics of the home-buying process and gain the knowledge and skills you will need to secure an affordable mortgage. Gain the tools and knowledge you need to be a successful long-term homeowner prepared for financial emergencies and necessary home repairs.
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MAP provides one-time mortgage assistance to Cuyahoga County homeowners who meet income eligibility guidelines and are having difficulty paying their mortgages because of the financial impact of COVID HAMP — Home Affordable Modification Program is a federally funded program designed to provide permanent loan modifications to qualified homeowners who are struggling with unaffordable mortgage payments.
At our law firm, we normally put your fees in your bankruptcy plan so you pay zero legal fees up front. Bank of America has, in some of our cases, been willing to work out some very good new loan repayment terms. Other lenders have deals where they will even forgive part of your mortgage.
Other options include short sales, where the mortgage lender agrees to take less than the balance you owe, so you can sell the house and avoid foreclosure.
Reinstatement of the original mortgage depends on many factors. If you can get your loan current again and stay that way, it may be an option with some relief from penalties. You should seek out a foreclosure attorney or a bankruptcy attorney to help you understand all of the terms and conditions for reinstatement first though before making any decisions on this subject.
Forbearance is very common now but often causes problems. It is not always a great foreclosure solution, but it can help keep your home for a while. In this case, the bank agrees to work with you on payment arrangements that allow you to be current again without penalties.
The catch here is there may still be late fees and other charges that will need to be paid back eventually. In Ohio you have three to five years to catch up missed payments that were caused by a forbearance. So that might be an option to consider. After filing a Chapter 13 Bankruptcy petition, the automatic stay goes into effect.
This will stop a foreclosure even if you do not intend to try to cure the arrearage and save the home from foreclosure.
A Chapter 13 Bankruptcy petition can stop the foreclosure process or buy time to come up with relocation plans is a common strategy to keep a roof over your head, and discharge other debts as well. The short sale is ideal in situations where people can no longer afford their home, but they want to stay there.
The lender will often agree not go after the borrower for the difference and they may forgive some of the property debt as well. Depending on where you live, this may be an option that could save your home without filing bankruptcy. Note that you may have to pay taxes on the amount forgiven in a short sale.
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