| Are you having trouble making mortgage payments? Act now to save your home and help your community!
For years, predatory mortgage lenders have been steering first time homebuyers and those looking to refinance into subprime loans, often Adjustable Rate Mortgages (ARMs) that would reset to rates the borrowers ultimately could not afford. Now, foreclosures have become a nationwide crisis. Families are losing their homes in record numbers, neighborhoods are being torn apart, and the U.S. and world economies are suffering from the fallout. And this is only the beginning – many more ARMs have not yet reset to the higher rate, and it is estimated that 2 million American families could face foreclosure within the next few years.
Predatory home loans are in the spotlight now due to the national foreclosure crisis, but ACORN has been fighting against predatory lending since 1999. ACORN members have engaged in outreach and education to help homeowners avoid becoming victims of predatory lending, led protests against specific lenders to win changes in their practices, and convinced regulators to crack down on the worst companies.
As the result of a three year campaign, ACORN members reached an agreement in 2002 with Household Finance and Beneficial, subsidiaries of Household International, to set up a Foreclosure Avoidance Program. This program helped thousands of Household/ Beneficial borrowers keep their homes and reduce the costs of their loans. A Fresh Start Program helped those who had already lost their homes obtain a new affordable mortgage. The companies also agreed to reform their home lending practices going forward to be more affordable for borrowers.
The 2002 ACORN report "Separate and Unequal" revealed that subprime loans were taking over much of the mortgage market, replacing more affordable prime loans. Many of these subprime loans were predatory, as lenders lied to borrowers about the details of their loans, neglected to offer them more affordable options, and failed to disclose all the hidden fees and future interest rate hikes. The report also showed that predatory subprime lenders were targeting African American, Latino and low-income communities, selling them bad loans even when applicants had good credit and could have qualified for better loan products.
In 2002, ACORN called for regulatory measures that could have curtailed these predatory practices. Unfortunately, the mortgage lending industry remained largely unregulated. ACORN continues to demand strong legislative measures to protect homeowners and the U.S. economy, as listed in our 10-point platform.
The 2006 ACORN study "The Impending Rate Shock" warned of the crisis that was about to hit the country due to exploding ARMs. This report also showed how pervasive these bad loan products continued to be, as well as how African American and Latino homebuyers were disproportionately targeted for high cost loans, even when they had comparable credit scores to white homebuyers.
ACORN members nationwide are fighting the foreclosure crisis head-on, by reaching out to thousands of troubled borrowers, negotiating with lenders for better practices, and lobbying lawmakers and regulators to reform the lending industry.
On Feb. 11, ACORN announced an agreement with Countrywide Financial, one of the country’s largest mortgage lenders, to work with the company on implementing best practices for negotiating loan modifications and workouts with troubled homeowners rather than turning to foreclosure. ACORN members are in negotiations with GMAC, another major lender, to reach a similar agreement. After staging repeated protests against Ocwen Financial, a mortgage giant with a particularly bad record in dealing with customers, the company has finally agreed to meet with ACORN members, who will push for a best practices agreement.
ACORN members are lobbying their legislators in cities, counties and states around the country, as well as on the national level, to implement regulations that will help stem the foreclosure crisis and curtail predatory lending. ACORN members worked to ensure that Congress passed $150 million in new funds for housing counseling organizations, $100 million of which was earmarked for foreclosure prevention. ACORN continues to work closely with Congress on anti-predatory lending legislation, such as the Foreclosure Prevention Act of 2008.
ACORN members have worked with legislators to pass foreclosure moratoriums in Minn.; Contra Costa County, Calif.; and Wilmington, Del. Other ACORN-backed initiatives to help homeowners have passed in Illinois, Philadelphia, Cleveland, Toledo, Denver, Boston, Wilmington, Jackson, Pine Bluff and Kansas City (Mo.).
ACORN Housing provides counseling for troubled homeowners through the HELP line at 1-866-67-ACORN. ACORN offices around the country also offer foreclosure fairs, where borrowers can meet with counselors and, often, their lending companies, to get help working out better loan terms. |
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