For Immediate Release
May 29, 2013
Contact:
Deonna Kirkpatrick
(216) 361-0718
dkirkpatrick@esop-cleveland.
Housing advocates question fairness in implementation of National Mortgage Settlement
Groups appeal to federal judge for fair lending data on homeowner relief
CLEVELAND, OH – Housing and consumer advocates have long questioned whether homeowner relief given under requirements of the National Mortgage Settlement is being given fairly to borrowers in communities hardest hit by the foreclosure crisis. This week groups voiced their concerns to the federal judge assigned to the case.
In a letter to U.S. District Judge Rosemary Collyer 17 groups including Americans for Financial Reform, Consumer Federation of America, Woodstock Institute, ESOP and others requested fair housing data on the implementation of the settlement.
"We are writing because we work with and are concerned about the communities and families who should be seeing improved processes, fairer mortgage servicing outcomes and compensation for illegally completed foreclosures as a result of the federal / state mortgage servicing settlement. We are deeply worried that the goals of the settlement are not being met fairly, and we urge you to require full public disclosure of the distribution of principal reduction and other loan modification benefits under the settlement so that you, the signatory parties, and the public can evaluate the outcomes adequately."
Advocates are particularly concerned that servicer-defendants may not be complying with state and federal fair housing laws.
This is not the first time groups have voiced their concerns. In previous letters to NMS Monitor Joseph Smith housing advocates have made three basic requests:
- Use the Monitor’s access to loan-level servicer data to show which neighborhoods are receiving homeowner relief under the settlement;
- Aggressively, immediately, and regularly monitor fair lending concerns, and make that process transparent to the public; and
- Fully audit fair lending compliance before relieving any of the servicers from their obligations under the settlement.
But so far neither the monitor nor the lenders have provided the information.
"We want to make sure the communities that were devastated by the crisis get their fair share of the relief mandated under the settlement," said Paul Bellamy, Director of Research and Development for Empowering and Strengthening Ohio’s People.
(Read full letter below)
Empowering and Strengthening Ohio's People (ESOP) is a HUD-approved foreclosure prevention counseling agency. We have nine offices across Ohio to help urban, suburban and rural homeowners. ESOP has been on the frontlines of the predatory lending and foreclosure epidemic since 1999, combining community organizing, foreclosure prevention and advocacy.
May 23, 2013
Judge Rosemary M. Collyer
United States District Court for the District of Columbia
333 Constitution Avenue N.W.
Washington D.C. 20001
Re: United States of America, et al., vs. Bank of America, et al.
Case No. 12-cv-00361, et seq.
Judge Collyer:
We are writing because we work with and are concerned about the communities and families who should be seeing improved processes, fairer mortgage servicing outcomes and compensation for illegally completed foreclosures as a result of the federal / state mortgage servicing settlement. We are deeply worried that the goals of the settlement are not being met fairly, and we urge you to require full public disclosure of the distribution of principal reduction and other loan modification benefits under the settlement so that you, the signatory parties, and the public can evaluate the outcomes adequately.
New York State Attorney General Eric Schneiderman has already brought public attention to the defendant banks’ systematic failure to implement the agreed-upon servicing reforms. In addition, we fear that defendants’ discretionary distribution of consumer relief under the settlement has systematically left minority homeowners and neighborhoods behind. It would be a disastrous result if the settlement compounded the disparate impact of the foreclosure crisis on communities of color by denying these communities a fair share of relief.
We are concerned that the servicer-defendants may not be complying with state and federal fair housing laws; and paragraph 17 of the consent order makes it clear that they must do so: Nothing in this Consent Judgment shall relieve Defendant of its obligation to comply with applicable state and federal law. We therefore ask that the defendants be required to report data that would make it possible to evaluate this aspect of their performance, including the census tract (along with the type and amount of relief) for each mortgage adjustment that they are claiming towards their obligations under the Mortgage Settlement.
For more detail, please see the attached letter to Joseph Smith, the settlement Monitor, which lays out why we believe this is a matter of central importance to achieving the goals of the National Mortgage Settlement.
The letter to Mr. Smith makes three basic requests:
- Use the Monitor’s access to loan-level servicer data to show which neighborhoods are receiving homeowner relief under the settlement;
- Aggressively, immediately, and regularly monitor fair lending concerns, and make that process transparent to the public; and
- Fully audit fair lending compliance before relieving any of the servicers from their obligations under the settlement.
Unfortunately, while we have raised these concerns repeatedly with Mr. Smith, and proposed a variety of ways to address them, no actions to make the data public or to measure fair lending compliance have been taken. The servicers who are subject to the settlement also appear to be strongly resisting any requests for this data.
As a practical matter the only way for us, the Monitor, the Court, and the American people to be assured that the fair housing laws are being followed is to have data on who has received what kind of assistance through the settlement.
We understand that tracking protected class status by borrower is sometimes problematic for reasons of privacy. With careful protection of personally identifiable information (PII), census tract information can provide a simple, albeit imperfect, proxy for measuring race and ethnicity. Given the large number of transactions involved, census tract level data would provide meaningful information about fair lending compliance under the remediation terms of the settlement.
A number of features of the housing market and the structure of the settlement make us particularly concerned that absent data collection , analysis, and corrective action if necessary there is grave danger that relief will go to wealthier and whiter communities, while lower income homeowners and homeowners of color will be left behind. These include the fact that it is simpler - and therefore cheaper - for servicers to get the same amount of credit under the settlement for adjusting one large mortgage than for adjusting multiple smaller loans.
We urge action to collect the relevant data soon, as the banks party to the settlement are moving quickly to complete their obligations to fulfill the agreement. It would be tragic to learn that fair housing violations occurred after the fact, when it is too late to remedy them.
Respectfully,
Americans for Financial Reform
Campaign for a Fair Settlement
Coalition on Homelessness & Housing in Ohio (COHHIO)
Community Legal Services Philadelphia, PA.
Consumer Action
Consumer Federation of America
Empowering & Strengthening Ohio’s People
Homes on the Hill
Leadership Center for the Common Good
Miami Valley Fair Housing
National Alliance of Community Economic Development Associations
National People’s Action
New Jersey Citizen Action
Ohio CDC Association
Toledo Fair Housing
Woodstock Institute
Working in Neighborhoods
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