Question: Are you aware that the President’s biggest supporters during the campaign are now the ones that are hardest hit by foreclosures-is this how he pays them back?
This article reveals that the majority of the individuals that supported this President during the campaign, which probably includes those individuals that he trained as ACORN members to bully banks into making risky loans to individuals that could least afford to make the mortgage payments and, as a result, contributed to our “mortgage meltdown” and ultimately our worst financial crisis since the Great Depression, are now the hardest hit by foreclosures, even after the outrages amounts of tax payer’s dollars spent by him and his administration to supposedly assist individuals having problems paying their mortgages–You Decide:
These are pertinent excerpts from this article:
“Turn the corner on 145th Street in Jamaica, Queens, and it is as though a cyclone has wheeled through.
One resident, Lakisha Brown, a hospital worker and mother of two, snatched her house back from foreclosure last month, if only temporarily. “We need to sell fast,” she says. “I’m just trying to save what’s left of my credit.” Across the street in this black middle-class neighborhood, Patrick Nicholas, a surgical technician in blue scrubs, shakes his dreadlocks and shrugs. He rents but is moving out. “The owner got foreclosed and told us to leave,” he says.
Six doors away, past two foreclosed and boarded-up homes, a burly man in a blue union jacket declines to give his name but his problem is evident. A foreclosure notice is pasted to the door of his house. His tone is mournful. “Tough times, man,” he says. “Tough, tough times.”
Late to arrive in the Northeast, the foreclosure crisis has swept through the New York region at an explosive pace in the past two years, destroying billions of dollars in housing wealth, according to a New York Times analysis of foreclosures filed since 2005 and federal mortgage data.
It now touches every corner of the region, from estates along the Connecticut Gold Coast to the suburban tracts of Long Island, where 6 percent of all mortgages are at least 90 days delinquent, the point at which foreclosure proceedings usually begin.
But the storm has fallen with a special ferocity on black and Latino homeowners, the analysis shows. Defaults occur three times as often in mostly minority census tracts as in mostly white ones. Eighty-five percent of the worst-hit neighborhoods — where the default rate is at least double the regional average — have a majority of black and Latino homeowners.
And the hardest blows rain down on the backbone of minority neighborhoods: the black middle class. In New York City, for example, black households making more than $68,000 a year are almost five times as likely to hold high-interest subprime mortgages as are whites of similar — or even lower — incomes.
This holds a special poignancy. Just four or five years ago, black homeownership was rising sharply, after decades in which discriminatory lending and zoning practices discouraged many blacks from buying. Now, as damage ripples outward, black families in foreclosure lose savings and credit, neighbors see the value of their homes decline, and renters are evicted.
That pattern plays out across the nation. A study released this week by the Pew Research Center also shows foreclosure taking the heaviest toll on counties that have black and Latino majorities, with the New York region among the badly hit.
On 145th Street in southeast Queens, just south of Linden Boulevard, attached brick homes with tidy, fenced-in gardens stretch into the distance. Children play tag under blooming oaks. But 8 of these roughly 50 homes face foreclosure; 4 are vacant; 2 have plywood boards nailed over punched-out windows.
“My district feels like ground zero,” said City Councilman James Sanders Jr., an African-American who represents hundreds of blocks in Queens like this one. “In military terms, we are being pillaged.”
Years ago many banks drew red lines on maps around black neighborhoods and refused to lend; more recently, some banks began taking aim at those neighborhoods for the marketing of subprime loans, say consumer advocates.
Black buyers often enter a separate lending universe: A dozen banks and mortgage companies, almost all of which turned big profits making subprime loans, accounted for half the loans given to the region’s black middle-income borrowers in 2005 and 2006, according to The Times’s analysis. The N.A.A.C.P. has filed a class-action suit against many of the nation’s largest banks, charging that such lending practices amount to reverse redlining.
“This was not only a problem of regulation on the mortgage front, but also a targeted scourge on minority communities,” said Shaun Donovan, the secretary of Housing and Urban Development, in a speech this year at New York University. Roughly 33 percent of the subprime mortgages given out in New York City in 2007, Mr. Donovan said, went to borrowers with credit scores that should have qualified them for conventional prevailing-rate loans.
For anyone taking out a $350,000 mortgage, a difference of three percentage points — a typical spread between conventional and subprime loans — tacks on $272,000 in additional interest over the life of a 30-year loan.
“There’s a huge worry that this will exacerbate historic disparities between the wealth of black and white families,” said Ingrid Ellen, co-director of the Furman Center for Real Estate and Urban Policy at New York University.
Not that white neighborhoods and towns in the New York region stand immune. During the past decade, buyers of all colors scrimped to buy homes in one of the nation’s most expensive housing markets.
Now mortgage delinquencies are rising sharply even in high-income, predominantly white enclaves, from Nirvana Avenue in Great Neck, N.Y., to Otter Rock Drive on a peninsula off Greenwich, Conn.
In the wealthiest ZIP codes, the median delinquency rate — although much lower than the regional rate, 5.3 percent — more than tripled from March 2005 to March 2008, then doubled again in the year since.
As a whole, the region has fared better than stretches of Florida and California, where about one in every five borrowers is at least 90 days behind on payments.
Yet the pain in the New York region is considerable. The delinquency rate in Essex County, N.J., stood at 11 percent in March, more than two percentage points higher than in Genesee County, Mich., home to the battered city of Flint, which stands as a national symbol of this recession.
A World of Damage:
Sitting on Long Island close by the Atlantic Ocean — salt air flares the nostrils on many days — Roosevelt is 79 percent black and has suffered grievously from segregation over the years. (Long Island, as measured by school and housing patterns, is among the most racially segregated suburban areas in the nation.) Still, as young black families sought bargains, home ownership rose.
Now subprime loans and a crippled economy have laid many of those families low. Olive M. Thompson, a 45-year-old nursing assistant, lost her $215,000, four-bedroom Cape in January, but not before she drained her 401(k) and declared bankruptcy.
A single mother of four, she recalled arriving in 2003 and seeing a home across the street with a garden so beautiful she fantasized about matching it. That house went into foreclosure.
“Next thing I know, it’s boarded up,” she said.
Foreclosure represents catastrophe on several levels. As families move to cheaper quarters, they often move their children to different schools. A rising number of foreclosures in a neighborhood is a singularly reliable predictor of an increase in violent crime, according to a recent academic study.
All these ills are magnified for black families, whose median net worth is far smaller than that of white families, and far more tied up in housing.
On Bainbridge Street in the predominantly black Bedford-Stuyvesant section of Brooklyn, 130-year-old brownstone homes loom like grand sailing ships, seemingly impervious to the ravages of time. That solidity is illusory. Looking closer, a visitor can identify homes in jeopardy by the cracked stoops, broken windowsills and tilting chimneys.
Alexia Billiart, 33, who is black, and her husband, who is white, moved a year ago from an expensive neighborhood into a handsome row house in Bedford-Stuyvesant, where they can manage their payments. Across the street, two foreclosed homes have fallen vacant, and a nearby apartment building stands broken and padlocked. At night, young men cluster on the stoops of the vacant homes.
“We figured we’d move here and participate in the rebirth of this block,” said Ms. Billiart, who works for a financial planning firm. “It seems to be going backward; it’s a little scary.”
Several black homeowners along these blocks, including well-paid professionals, confide that they pay strikingly high mortgage rates — 9, 10 or 11 percent annually. How that came to happen is a complicated story.
Over the last decade, many commercial banks, from Wells Fargo to Bank of America to HSBC, acquired subprime lenders that thrived by offering loose lending standards and high interest rates. Court records show that brokers sometimes received bonuses for steering borrowers into high-interest loans laden with extra costs.
Even many blacks and Latinos who say they sought conventional loans ended up with subprime mortgages from these lenders. One reason, many say, was a mistrust of conventional banks.
Colvin Grannum grew up in a black neighborhood in Brooklyn and became president of the Bedford-Stuyvesant Restoration Corporation, a nonprofit organization that builds and renovates housing. His father bought several properties in the 1950s and ’60s, often without turning to banks.
“I don’t want to say it’s in the cultural DNA, but a lot of us who are older than 30 have some memory of disappointment or humiliation related to banks,” Mr. Grannum said. “The white guy in the suit with the same income gets a loan and you don’t?”
“So you turn to local brokers, even if they don’t offer the best rates.”
This may help explain an unusual phenomenon: Upper-income black borrowers in the region are more likely to hold subprime mortgages than even blacks with lower incomes, who often benefit from homeownership classes and lending assistance offered by government and nonprofits.
Help for Lost Causes:
The foreclosure storm shows few signs of abating. Scam artists and deed thieves prey on the desperate as complaints flood the offices of local prosecutors. In a church meeting room in the Guyanese neighborhood of Flatlands, Brooklyn, 200 homeowners tell of paying $3,000 or $4,000 to firms to “fix” their mortgage troubles. Often, these firms disappear with the money.
In southeast Queens, politicians have asked homeowner advocacy groups to set up shop in their offices. “My office is St. Jude, the patron saint of lost causes,” Councilman Sanders said.
A few step clear of the rubble. Antoinette Coffi, 45, saw an ad on the subway, a photo of a black couple gazing at a gleaming home. She walked into that company’s office two years ago, and six weeks later she, her two children, her mother and cousin had a home in Queens. She ended up with not one but two mortgages, including a variable-rate loan that started at 11 percent.
Last year her work hours were cut and she fell behind. “The stress, oh my God,” she said, her voice thick with the juicy vowels of her native West Africa.
With the help of Changer, an advocacy group, she has kept the house. But her neighbors may not be as lucky. “Everywhere, everyone talks about being put in the street,” she said.
Foreclosure is cutting so deep as to reshape the geography. If enough homes go vacant in Queens and Newark and Roosevelt, a cycle of disinvestment could beckon.
“Some home-owning neighborhoods may turn back to rentals and some might not survive,” said Jay Brinkman, chief economist for the Mortgage Bankers Association in Washington. “They might end up bulldozed.”
That sounds a touch apocalyptic. The Obama administration has set aside $50 billion to persuade banks to reduce monthly payments to help borrowers avoid foreclosure. Immigrants continue to flock here, and New York City officials have spent tens of billions of dollars since the 1980s to rebuild and shore up hard-pressed neighborhoods.
But few in 1965 would have predicted the South Bronx devastation of 1979. At the very least, tens of thousands of people will lose their homes, their savings and their dreams.
“Rather than helping to narrow the wealth and home ownership gap between black and white,” Mr. Grannum said, “we’ve managed in the last few years to strip a lot of equity out of black neighborhoods.”
Note: This article reveals President Obama’s political outlook when he returned to Chicago in 1991 after three brilliant years at Harvard Law School and decided to dive into electoral politics by running for the Illinois Senate, which I believe is pertinent to this issue-You Decide:
What Makes Obama Run?: Posted on the Chicago Reader-By Hank De Zutter-On December 8, 1995:
These are pertinent excerpts from this article:
“Lawyer, teacher, philanthropist, and author Barack Obama doesn’t need another career. But he’s entering politics to get back to his true passion–community organization.
When Barack Obama returned to Chicago in 1991 after three brilliant years at Harvard Law School, he didn’t like what he saw. The former community activist, then 30, had come fresh from a term as president of the prestigious Harvard Law Review, a position he was the first African-American to hold. Now he was ready to continue his battle to organize Chicago’s black neighborhoods. But the state of the city muted his exuberance.
“Upon my return to Chicago,” he would write in the epilogue to his recently published memoir, Dreams From My Father, “I would find the signs of decay accelerated throughout the South Side–the neighborhoods shabbier, the children edgier and less restrained, more middle-class families heading out to the suburbs, the jails bursting with glowering youth, my brothers without prospects. All too rarely do I hear people asking just what it is that we’ve done to make so many children’s hearts so hard, or what collectively we might do to right their moral compass–what values we must live by. Instead I see us doing what we’ve always done–pretending that these children are somehow not our own.”
Today, after three years of law practice and civic activism, Obama has decided to dive into electoral politics. He is running for the Illinois Senate, he says, because he wants to help create jobs and a decent future for those embittered youth.
But when he met with some veteran politicians to tell them of his plans, the only jobs he says they wanted to talk about were theirs and his. Obama got all sorts of advice.
Some of it perplexed him; most of it annoyed him. One African-American elected official suggested that Obama change his name, which he’d inherited from his late Kenyan father. Another told him to put a picture of his light-bronze, boyish face on all his campaign materials, “so people don’t see your name and think you’re some big dark guy.”
Obama, running to be the Democratic candidate for the 13th District on the south side, was also told–even by fellow progressives–that he might be too independent, that he should strike a few deals to assure his election. Another well-meaning adviser suggested never posing for photos with a glass in his hand–even if he wasn’t drinking alcohol.
“Now all of this may be good political advice,” Obama said, “but it’s all so superficial. I am surprised at how many elected officials–even the good ones–spend so much time talking about the mechanics of politics and not matters of substance. They have this poker chip mentality, this overriding interest in retaining their seats or in moving their careers forward, and the business and game of politics, the political horse race, is all they talk about. Even those who are on the same page as me on the issues never seem to want to talk about them. Politics is regarded as little more than a career.”
Obama doesn’t need another career. As a civil rights lawyer, teacher, philanthropist, and author, he already has no trouble working 12-hour days. He says he is drawn to politics, despite its superficialities, as a means to advance his real passion and calling: community organization.
Obama thinks elected officials could do much to overcome the political paralysis of the nation’s black communities. He thinks they could lead their communities out of twin culs-de-sac: the unrealistic politics of integrationist assimilation–which helps a few upwardly mobile blacks to “move up, get rich, and move out”–and the equally impractical politics of black rage and black nationalism–which exhorts but does not organize ordinary folks or create realistic agendas for change…..
The political debate is now so skewed, so limited, so distorted,” said Obama. “People are hungry for community; they miss it. They are hungry for change.”
“What if a politician were to see his job as that of an organizer,” he wondered, “as part teacher and part advocate, one who does not sell voters short but who educates them about the real choices before them? As an elected public official, for instance, I could bring church and community leaders together easier than I could as a community organizer or lawyer. We would come together to form concrete economic development strategies, take advantage of existing laws and structures, and create bridges and bonds within all sectors of the community. We must form grass-root structures that would hold me and other elected officials more accountable for their actions.
“The right wing, the Christian right, has done a good job of building these organizations of accountability, much better than the left or progressive forces have. But it’s always easier to organize around intolerance, narrow-mindedness, and false nostalgia. And they also have hijacked the higher moral ground with this language of family values and moral responsibility.
“Now we have to take this same language–these same values that are encouraged within our families–of looking out for one another, of sharing, of sacrificing for each other–and apply them to a larger society. Let’s talk about creating a society, not just individual families, based on these values. Right now we have a society that talks about the irresponsibility of teens getting pregnant, not the irresponsibility of a society that fails to educate them to aspire for more.”
Obama said he’s not at all comfortable with the political game of getting and staying elected, of raising money in backroom deals and manipulating an electable image.
“I am also finding people equivocating on their support. I’m talking about progressive politicians who are on the same page with me on the issues but who warn me I may be too independent.”
Although Obama has built strong relationships with people inside Mayor Daley’s administration, he has not asked for their support in his campaign. Nor has he sought the mayor’s endorsement.
“I want to do this as much as I can from the grass-roots level, raising as much money for the campaign as possible at coffees, connecting directly with voters,” said Obama. “But to organize this district I must get known. And this costs money.
I admit that in this transitional period, before I’m known in the district, I’m going to have to rely on some contributions from wealthy people–people who like my ideas but who won’t attach strings. This is not ideal, but it is a problem encountered by everyone in their first campaign.
“Once elected, once I’m known, I won’t need that kind of money, just as Harold Washington, once he was elected and known, did not need to raise and spend money to get the black vote.”
Note: This is another recent article that seems to relate to this issue-You Decide:
Obama Says U.S. Long-Term Debt Load ‘Unsustainable’: Posted on Bloomberg.com-By Roger Runningen and Hans Nichols-On May 14, 2009:
Note: These articles seem to support my recent blog-You Decide:
First 100 Days-Administration Working Hard To Fix The Problems President Bush Left Behind?
“Food For Thought”
“God Bless & Keep Our US Safe”