More than 2.7 millions Americans who received mortgage loans between 2004 and 2008 have lost their homes to foreclosure. In Ohio, more than 99,000 residents who got mortgages during that period have lost their homes, according to the Center for Responsible Lending.
More than 127,000 Ohio families are more than 60 days late on their payments and are at serious risk of foreclosure.
That’s why the Buckeye state is sending out an all-points bulletin for protection against abusive practices in the financial marketplace. Research shows that these high foreclosure rates are more a function of the risky features of the loans that were made than any characteristics of the borrower.
Our nation and this state face problems in the current housing market because of a failure of banking regulators to prevent banks from offering risky loans that were doomed from the start. So far, many, though not all, Senate Republicans have sided with Big Banks instead of consumers.
Earlier this year, 44 Republican senators signed a letter stating they would not confirm any nominee tapped to head the new Consumer Financial Protection Bureau unless changes are made to the agency to weaken its authority and handicap its ability to protect adequately consumers.
But in recent weeks, Sen. Scott Brown, a Massachusetts Republican and not a signer of the letter, announced his support for the nomination of former Ohio Attorney General Richard Cordray to become permanent director of the bureau. We urge Ohio’s Republican senator, Rob Portman, to join Brown and support Cordray’s nomination as well.
Ohioans from both parties want a tough traffic cop on Wall Street to write new rules of the road for the mortgage market. With Cordray at the helm, the Consumer Financial Protection Bureau have the ability to police the practices of the major banks and non-bank financial institutions that caused the mortgage crisis that plunged the nation into recession.
Sen. Portman has another chance to show he is for everyday Ohioans. As early as this week, there may be a floor vote in the Senate on the Cordray nomination.
The stakes are high. While Americans from every background have already lost their homes, millions more are still paying their mortgages but have seen their home values plummet, taking down their wealth and financial security, too. The Federal Reserve estimates that, since 2005, declining home values have cost homeowners $7 trillion in lost wealth that they could have used to weather the economic turmoil, send their kids to college, start or expand a small business, fund retirement or pass along to the next generation.
This crisis has hit hardest at communities of color, especially African-Americans and Latinos, who were targeted for toxic subprime loans that were designed to fail. As a result of foreclosures, African-American and Latino communities have lost more than $370 billion in wealth, making it more difficult for them to achieve the economic stability and prosperity that are the hallmark of the American dream.
In Ohio, African-Americans are more than twice as likely as white residents to have lost their homes to foreclosure, according to the Center for Responsible Lending.
Congress created the Consumer Financial Protection Bureau last year to bring order, transparency and fairness to the financial services industry. Now it’s time for the bureau get to work.
The bureau’s mission is more urgent than ever: making sure that borrowers have the necessary information to shop for the mortgage that best fits their needs, that there are no traps hidden in the fine print, and that mortgage companies treat borrowers fairly if they hit hard times. Filling a crucial need for racial and ethnic minorities, the agency will ensure that all borrowers can get the best loan for which they qualify, regardless of their skin color or national origin.
The bureau officially opened its doors on July 21, and its staff is hard at work on the many tasks assigned to it by Congress. But, without a director, the agency has not been able to exercise its full authority.
Consumers cannot afford to wait any longer for the Consumer Financial Protection Bureau. Sen. Portman, it’s time to confirm Richard Cordray.
Curry is the executive director of the Fair Housing Advocates Association in Akron and Goldberg is the special projects director for the National Fair Housing Alliance.