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By Nancy Wilberg Ricks, Senior Policy and Communications Strategist, NCLR
More than five million homeowners in the United States are paying much more for their homes than they are worth. Ironically, one of those homeowners is Sylvia Alvarez, who heads the Housing & Education Alliance, a leading housing counseling agency in Tampa, Fla., and an NCLR Affiliate. Alvarez and her dedicated staff have helped many families escape unsustainable mortgages.
Alvarez is an ideal candidate for principal reduction, but she cannot get help because her mortgage is owned by Fannie Mae. Most of the largest banks have granted some families principal write-downs, understanding that reducing the principal on a home for a struggling homeowner is a win-win. Families stay in their homes, continue to pay their mortgages, and stabilize the economy.
After the housing crisis, many experts knew that the solution to a healthier housing market was large-scale principal reduction, and the best place to start was with the Federal Housing Finance Agency (FHFA), which manages Fannie Mae and Freddie Mac. Consumer advocates fought very hard to ensure that FHFA had a strong leader and advocate for homeowners.
That’s why NCLR and our allies rallied for Mel Watt, a former U.S. representative and housing proponent, to be appointed as director of FHFA. We fought for Watt so he could fight for homeowners like Alvarez who need relief now. In 2013 we won the fight, and Watt was confirmed as the leader of the most powerful housing entity in the business.
Two years later, we still wait for progress. During the first year of his leadership at FHFA, Watt wanted to study the issue. Research points to obvious benefits of helping homeowners keep their homes, and even the 2013 Congressional Budget Office reported that a principal reduction plan could assist 1.2 million borrowers and save Fannie Mae and Freddie Mac $2.8 billion.
Yet Watt wavered.
Now, eight years since the height of the crisis, Watt and FHFA refuse to implement principal reduction. Families pay mortgage dollars that far exceed the value of their homes, and many cannot keep up. In the meantime, banks and investors are pushing out homeowners and acquiring properties at pennies on the dollar. This devastates communities. Turning long-seasoned homeowner neighborhoods into rental communities might not seem bad, but studies indicate that homeownership translates into stability and greater investment in one’s own neighborhood.
When will FHFA and Mr. Watt finally give households the relief they need? Principal reduction remains the solution. It would finally restore homes to their true value. It would also help families hold on to the largest investment most will ever make.
By David Castillo, Communications Department, NCLR
This week in “Living the American DREAM,” we meet 30-year-old Yazmin Abreu of Orange County, California. Like so many young people profiled in this space, Yazmin arrived in the United States as a child. She was eight years old, and her young mind could not fully grasp why her family was leaving what she thought was a happy life in Mexico. What she didn’t realize was that her father, like many parents, was looking for a way to sustain his family, and coming to the U.S. was the chance to realize his potential. He decided to move first, and Yazmin, her siblings, and her mother would join later.
For much of her early life, Yazmin was not aware of her immigration status. She struggled some in school, though not with her academics. Rather, Yazmin had difficulty socially. Thanks to a great elementary school teacher who took an interest her, she was able to overcome these challenges. In middle school Yazmin discovered that she was an undocumented immigrant. That revelation would affect how guarded she was about many details of her private life.
Despite the problems presented by her status, Yazmin was determined to go to college, though she knew getting there would not be easy. However, thanks to the California DREAM Act, she was able to pay in-state tuition. She also confided in a guidance counselor about being undocumented, and that counselor helped her in the college application process.
Although she was able to attend college, it wasn’t always an easy road. Yazmin’s commute to and from school was an hour and a half every day. Often she made use of the computer labs until they closed, and she wouldn’t get home until midnight. She admits that it took a while for her to graduate, as she had to take some time off to raise funds for classes. Her hard work and dedication finally paid off when, in 2012, Yazmin graduated from California State University, Long Beach with a degree in health science education.
Freshly graduated and ready to work, Yazmin didn’t find a job easily, especially due to her immigration status. Later that year, however, after receiving administrative relief through the Deferred Action for Childhood Arrivals (DACA) program, Yazmin hit the ground running, reveling in the practice of even applying for a job legally.
“Right now, I can go to websites, look for jobs, and apply to them, and it is such a sense of freedom,” said Yazmin. She was even excited to go to the DMV. “I had the biggest smile on my face. I was finally able to set foot in there. That fear just goes away.”
Yazmin is still searching for the right career, and she is determined to make it happen. In the meantime, she wants to ask those who are blocking expanded DACA and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) why they are so intent on deporting people who will contribute greatly to the United States, especially given the numbers of people who are already benefiting from relief.
“This country needs DREAMers like us, so why give it away?” she asked. “I know I’m going to achieve the American Dream. They need to think about the future.”
This week, the 5th Circuit Court of Appeals denied the Department of Justice’s request for an emergency stay to lift an injunction against the president’s administrative relief programs, expanded Deferred Action for Childhood Arrivals (DACA+) and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA), so they could move forward. The court’s decision leaves in limbo millions of American families as they wait to apply for the two programs.
This is not the end of legal proceedings on this matter, however, as an appeal of the preliminary injunction is scheduled for the week of July 6. While this is a setback, this is not the end of the long and arduous legal road. It is important to note that the Fifth Circuit Court has still not decided on the full appeal of the case to lift the injunction.
“Our community remains steadfast in our commitment to keeping hardworking families together,” said Clarissa Martinez-De-Castro, NCLR Deputy Vice President of the Office of Research, Advocacy and Legislation, in a statement. “Not only will these executive actions bring relief to millions of American families, they are in the best interest of this nation’s economy and national security.”
Martinez-De-Castro further highlighted how those who are blocking relief in order to settle a score with the president are alienating the large and influential voting bloc of Latinos who “will remember these very personal attacks on our families and our community come Election Day,” said Martínez-De-Castro. “It should not be lost on anyone that a key function of the president is to nominate federal judges, and for the Senate to ‘advise and consent’ to those nominations. We will continue to remind our community that by exercising their power at the ballot box, they can help determine who will be making judicial decisions that, with the stroke of a pen, can snatch potential lawful status away from millions.”
What to Watch This Week:
The House is in recess, returning the week of June 1.
The Senate is in recess, returning Sunday, May 31, to continue consideration of legislation related to reauthorization of the Patriot Act, with some provisions set to expire Sunday at midnight.
On Monday, the president will host a breakfast in honor of Memorial Day. Veteran and Military Family Service Organizations and senior military leadership will be in attendance, as well as organizations that support the families of the fallen, including the Tragedy Assistance Program for Survivors; Gold Star Mothers; Gold Star Wives, Sons and Daughters in Touch. This breakfast in the State Dining Room is closed press.
Later in the morning, President Obama will travel to Arlington National Cemetery where he will lay a wreath at the Tomb of the Unknown Soldier and deliver remarks. The wreath-laying as well as the president’s remarks are open to pre-credentialed media.
On Tuesday, the president will hold a bilateral meeting with NATO Secretary-General Stoltenberg at the White House; the vice president will also attend. The leaders will discuss the impact of Russia’s actions on the European security environment, NATO’s evolving effort to meet challenges from the south, and the alliance’s ongoing Resolute Support Mission to train, advise and assist the Afghan National Security Forces. They will also assess allied progress on the defense investment targets agreed at Wales, and share their priorities for the next NATO Summit in 2016.
On Wednesday, President Obama will travel to the Miami, Florida area for DNC events. The President will remain overnight in Florida.
On Thursday, the president will visit the National Hurricane Center to receive the annual hurricane season outlook and preparedness briefing. Further details about President Obama’s travel to Florida will be made available in the coming days.
On Friday, the president will attend meetings at the White House.
Education – Attention remains on the Senate as members prepare to take up the “Every Child Achieves Act,” a bipartisan ESEA reauthorization, in early June. There has been some discussion on the Hill that the timing for bringing this bill to the floor could slip to July or even the fall. However, HELP Committee Chairman Alexander anticipated the bill will come to the floor shortly, with senators able to offer amendments. The business and civil rights community is continuing to work to get support on both sides of the aisle for an amendment that would strengthen the accountability system in the bill.
Ex-Im – The charter for the Export-Import Bank expires June 30, and Senate Majority Leader McConnell said he would bring S. 819, a bipartisan reauthorization bill, to the floor for a vote. Senator Cantwell noted it could potentially be attached as an amendment to another piece of legislation. While the measure might pass in the Senate, its fate in the House is uncertain. House Republicans are split on whether to extend the bank’s lending authority or to let it lapse, with top Republicans opposing extension, including Financial Services Chairman Hensarling, Majority Whip Scalise and Ways & Means Chairman Ryan. House Democrats are expected to vote en bloc for extension, which President Obama also supports.
Data Collection – Majority Leader McConnell scheduled votes on Sunday evening to address expiring provisions of the Patriot Act. Before the Memorial Day recess, the Senate was unable to pass the USA Freedom Act, a House bill that would reform the NSA’s ability to collect phone records by a 57-42 vote. A proposed two-month stopgap extension also failed, 54-45. Efforts to enact even shorter extensions were thwarted by Republican Senator Paul, who objected under Senate procedural rules.
Week Ending May 22
This week in immigration reform: NCLR and others raise awareness on original DAPA implementation date; NCLR continues blog series on deferred action recipients; and an update on state-level activity.
NCLR and advocates participate in National Day of Action in support of DAPA: This Tuesday was the original date the Obama administration would have begun accepting applications for Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). However, that deferred action program that would bring relief to millions of people is currently on hold, pending an appeal in the Fifth Circuit Court of Appeals. Our press statement notes: “Instead of celebrating with the millions of families who would finally gain a reprieve from the needless separations that have torn apart our communities, today we continue to navigate this drawn-out, unnecessary litigation that has left so many American families in limbo,” said Clarissa Martínez-De-Castro, Deputy Vice President of the Office of Research, Advocacy and Legislation at NCLR (National Council of La Raza). “By pursuing this lawsuit, the opponents of these programs accomplish nothing beyond damaging our economy, jeopardizing our national security and attacking Latino families.” A decision from the Fifth Circuit Court of Appeals is expected any day now, although there is no deadline for a decision. For more information on the possible litigation scenarios, check out this document from the National Immigration Law Center.
Studies show DAPA would benefit the American economy. A piece from the Center for American Progress outlined how: “DAPA would result in a cumulative gross domestic product, or GDP, increase of $164 billion, an $88 billion increase in incomes for all Americans, and create 20,538 jobs per year over the next 10 years. Moreover, DAPA would result in payroll tax increases of $16.7 billion over five years.”
NCLR compiled tweets from fellow advocates supporting DAPA on May 19. See them in our blog.
— La Coalición (@la_coalicion) May 19, 2015
NCLR blog features DACA recipient Jose Alguiluz: This week’s installment of our ‘Living the American DREAM’ blog profiles a DREAMer from Honduras. When he was 15-years-old he came to the U.S. to receive medical treatment at John Hopkins Hospital in Baltimore, Maryland. He attended Montgomery College and applied for DACA once it was announced in 2012. DACA enabled Jose to fulfill his dream of becoming a nurse and since January 2014 he has been employed at Washington Adventist Hospital as a registered nurse. Jose also finds time to advocate for his fellow DREAMers and he worked to pass the Maryland DREAM Act. He also is a member of NCLR Affiliate CASA de Maryland’s Board of Directors. Jose is continuing his studies and hopes all those in his community can realize their potential through deferred action.
- This week the Nebraska legislature voted to reverse a policy denying driver’s licenses to DACA recipients. A Star Tribune article notes that Arizona and Nebraska were the only states where those granted deferred action were ineligible for licenses. The Arizona law was blocked by the court last July. DACA recipients are now eligible for a driver’s license in all fifty states.
- Controversial Arizona Sheriff Joe Arpaio’s racial-profiling case is costing Arizona taxpayers millions of dollars. A New York Times article notes the county has already doled out $45 million and more costs are expected to materialize. Unrelated to the racial-profiling case, the county has also paid out $74 million to cover other judgments, settlements and legal fees due to lawsuits involving Arpaio and his office.
By Jonathan Marrero, Senior Digital Manager, NCLR
This Memorial Day, the NCLR familia honors the memory of soldiers who have made the ultimate sacrifice protecting our freedoms, including the countless Latinos who have served courageously since our country’s founding.
Hispanics have a long, rich history of service in the U.S. Armed Forces that dates back to the 19th century. During World War I, Latino soldiers fought alongside their non-Hispanic brothers and sisters in Europe. One such soldier, Private Marcelino Serna, an undocumented immigrant of Mexican descent, was awarded two of the military’s highest honors after returning from the battlefields in Europe: the Purple Heart and the Distinguished Service Cross. Serna was awarded these medals for singlehandedly capturing 24 German soldiers. His story is one of many that exemplify the pride and honor Latinos have taken in their service to this great country.
In World War II, many Mexican American servicemen and women were stationed in the Philippines, where they fought valiantly beside non-Hispanic soldiers against the Japanese in battles that endured for months. One such battle took place in the Bataan Peninsula. After three months of hard fighting, the soldiers were ordered to surrender, and eventually they embarked on the tortuous 85-mile Bataan Death March. Many of those who started the march did not finish—Latinos included.
This longstanding tradition of service and heroism continues today with the more than one million Latinos currently in uniform—a point of pride for us here at NCLR. So, as we head into this holiday weekend, let’s reflect on the sacrifices made by countless soldiers throughout American history.
In remembrance of those who have fallen in the line of duty, NCLR asks that you join us on Monday, May 25 at 3:00 p.m. local time for a national moment of remembrance. Let’s reflect on the lives given so that Americans can enjoy the most fundamental of rights: life, liberty, and the pursuit of happiness.
By Nancy Wilberg Ricks, Senior Policy and Communications Strategist, NCLR
Last week, Senate Banking Committee Chairman Richard Shelby introduced a 218-page bill, the “Financial Regulatory Improvement Act of 2015,” which would substantially roll back gains made in the Dodd-Frank Act. This is deeply concerning and should give all Americans pause.
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law to right the economy and prevent another financial crisis. It involved some of the most expansive bipartisan legislation since the New Deal in the 1930s.
The nation has already benefited from Dodd-Frank’s improvements to the market. Families are no longer completely exposed to the risk of unnecessarily losing their homes. Credit card terms are better and clearer. Many fringe financial products have been brought to light and restrained. Consumers are more empowered and aware of their rights. This was the intended result and consumers are grateful.
Today the Senate Banking Committee held a markup on rollbacks that would swing the pendulum backward—to the state of deregulation that led to the financial crisis. This is unacceptable.
The financial industry is experiencing growing pains from Dodd-Frank. Some in Congress see this as a bad thing. Consumers and honest lenders think otherwise. The methods banks and nonbanks alike used to make a profit were hazardous to the market and acutely harmful for families, so many of whom saw a generation of wealth vaporize.
In today’s markup, we saw committee members vote along party lines, some in support of vastly loosened standards for banks and nonbanks. Other senators voted for families to maintain a foothold in the financial industry and keep consumer protections.
Let’s Not Repeat This Part of History
While most Americans have grown tired of hearing about the crisis and recovery, we are at risk of repeating history. Latino families are just now beginning to recover. Hispanics lost 66 percent of their household wealth between 2005 and 2009. These trends were exacerbated by geographic location, as a disproportionate share of Latinos live in California, Florida, Nevada, and Arizona, the states that experienced the steepest declines in housing values during the crisis.
In the aftermath, there was a palpable sense that the financial system was fundamentally unsound and action was needed to prevent a future crisis of the same magnitude. That is where Dodd-Frank came in to make repairs.
Responsible regulations and oversight are essential to protecting Latino consumers and ensuring that honest lenders strengthen today’s economy. Hispanics are the nation’s largest minority group, representing 16.4 percent of the U.S. population. Of the 17 million new homes that will be created between 2010 and 2025, seven million will be purchased by Hispanics.
The strong protections that were enacted by the Dodd-Frank Act are critical to ensuring that families can afford their loans and are not targeted by predatory players. Beyond maintaining commonsense regulations, Congress should have viewed this legislative season as a time to finally build the legacy of financial empowerment for families throughout the nation. Instead, they strive to return the markets to risky, unstable times.
When the Consumer Financial Protection Bureau (CFPB) was created in 2010 as part of landmark financial reform to protect American consumers, auto dealers were notably excluded from the CFPB’s authority. Although a car is most Americans’ second-largest purchase, the only federal agency dedicated to consumer protection has been unable to directly regulate auto lenders to prevent discriminatory practices.
With outstanding car loans totaling $935 billion, fairness and transparency in auto lending is essential for a fair economy that works for all communities. Though Congress has yet to introduce a bill to bring auto lending under CFPB scrutiny, the time is right for a real legislative fix that would end carve-outs originally included for the auto lending industry.
Many other industry and consumer experts have recognized the need for a change and have come out in support of reform. Last week, the Bipartisan Policy Center (BPC) published a blog post urging Congress to level the auto lending playing field. The call to give the CFPB authority to weed out discrimination in the auto industry is consistent with a September 2013 report from BPC’s Financial Regulatory Reform Initiative.
Currently, auto dealers are given wide leeway in how they charge interest rates to consumers, often varying and raising rates for different consumers without reason. While this often unfair practice affects all car buyers negatively, research shows Blacks and Latinos are more likely to see an interest rate markup than White consumers. Controlling for creditworthiness, Latinos and Blacks still typically receive higher markups than White borrowers.
While the CFPB already has taken action to root out auto lending discrimination, it must currently do so through indirect means, by focusing on banks that auto dealers work with rather than the unscrupulous auto dealers themselves.
Through a strong legislative fix, Congress could remove the needless exclusion of auto lending from the CFPB’s authority and bring fairness to a market impacting a highly significant portion of consumers’ financial lives.
For most Americans today, having a car is a necessity, not a luxury. From transportation to and from jobs to trips to the grocery store, cars remain a major part of life for the vast majority of Americans. Communities of color deserve to shop for cars free from interest rate discrimination.