Consumer Protection Deserves a Vote

U.S. Senators should stop the assault on the CFPB and hold a vote on the Cordray nomination.

CLEVELAND, OH – Last week the Senate Committee on Banking, Housing and Urban Affairs voted to move forward with the nomination of Richard Cordray for Director of the Consumer Financial Protection Bureau.

Cordray has won praise from bankers and consumer advocates, and from Republicans as well as Democrats. Yet the nomination and the vital work of the CFPB are in peril.  That’s because 43 Senators are threatening to block a full floor vote unless the bureau’s structure is changed to drastically reduce the its authority and funding. These changes would weaken the bureau and leave American consumers without a voice among federal financial regulators.

It’s time to stop the attack on the CFPB and let the bureau do its job.  Senators should end the games and hold a full floor vote on Cordray’s nomination.

“The last year has shown the nation what ESOP has known all along,” said Mark Seifert, ESOP’s Executive Director, “that Richard Cordray works in a fair, transparent and professional way to protect American consumers while balancing the needs of responsible players in the financial industry.  All the negative predictions about how the CFPB would hurt the industry have not come true.  It’s time to stop coming up with bogus excuses to block this nomination and the work of the bureau.”

The Senate faces a simple choice: allow an up/down vote on this nomination, or open the door to more of what the CFPB is working hard to prevent – abusive and deceptive banking and lending practices like those that fed an epidemic of foreclosures, saddled millions of Americans with unmanageable debt, and triggered a financial meltdown.

The bureau is finally taking some of the lessons learned from the financial crisis and using them to institute sound and consistent rules that protect American consumers without unduly burdening responsible players in the financial industry.

Forbes has called the CFPB “Main Street’s Best Friend in Government.” In less than two years since the bureau began its work it has made great strides:

• Returning more than $400 million to nearly six million consumers cheated by credit card companies.
• Standing up for students and families trapped in high-cost education loans
• Protecting military families against illegal foreclosures and deceptive education-loan practices
• Enabling consumers to finally know just how much they are charged for sending money overseas, and how much their family members actually receive
• Going after fraudulent companies that collect up-front fees for help they don’t deliver to desperate borrowers
• Beginning to monitor the out-of-control world of credit reporting and debt collection
• Giving financial consumers an effective way to complain about errors and misdeeds

(Click here for a list of accomplishments by the bureau.)

Polls show strong and broad public support for the bureau, across party lines. No one has questioned Mr. Cordray’s qualifications or performance. Even many financial industry leaders agree that the CFPB, under his leadership, has been a fair and reasonable regulator.

It is wrong to hold up the nomination of a qualified leader, and hold hostage a law passed by Congress, signed by the President and supported by large majorities of the public.  It is bad for consumers, bad for responsible lenders, and bad for the broader economy.  We strongly encourage Senators to show they have the best interest of American consumers at heart and hold a full vote on the Cordray nomination.

 

Politics Defy Common Sense in Cordray Opposition

Here we go again.  It takes Washington, D.C. politicians to take something so simple and common sense and turn it into a complicated excuse to act like petulant children.

Last week President Obama once again nominated former Ohio Treasurer and Attorney General Richard Cordray to be director of the Consumer Financial Protection Bureau.

     The first time Cordray was nominated Republican Senators blocked a vote on his nomination and used procedural tricks to keep the President from moving forward.  They weren’t upset about Mr. Cordray’s qualifications, record of service or character.  Instead they were ticked off they couldn’t get their way to restructure agency so they decided to take their ball and go home.

Now it looks like the D.C. crowd will replay the same drama all over again.  Republicans have renewed their call for a 5-member panel to lead the agency instead of a director, as if adding four more people to the public payroll falls right in line with their effort for smaller more efficient government.  They also want the bureau’s funding subject to congressional approval.  But given how long it took them to approve funding for super storm Sandy relief one could only imagine how the bureau’s funding would be delayed, politicized and stripped to prevent any real work from getting done.

However this time there is proof that fears about how the CFPB and Cordray would hurt the industry with crushing regulations were completely unfounded.  By all accounts the CFPB, under Cordray’s direction, has taken a fair and level-headed approach to looking at mortgages, credit cards and other financial products.  The agency has been transparent and opened all of its efforts to industry and consumer advocates, incorporating their feedback into final rules and reforms.

Make no mistake the goal of all the political posturing is to protect the very industry that nearly destroyed our economy instead of average American consumers who are still suffering the effects of the financial crisis.  The bureau’s opponents are also upset that the President bypassed their petty parlor tricks last year and put Cordray in charge with a recess appointment.  So now they want to put their foot down and insist on getting their way.

But the facts are simple.  Unfair and even illegal financial practices brought our economy to the brink, costing millions of Americans their homes and jobs, destroying neighborhoods and decimating the financial support for basic public services.  The Consumer Financial Protection Bureau is finally taking some of the lessons learned from the crisis and using them to institute sound and consistent rules that protect American consumers and even the financial industry from self-destruction.  At a time when Congress has pitiful approval ratings you would think that they’d embrace the agency designed to protect the people who give them their jobs.

So while we think it goes without saying, we’ll say it anyway; Senators should approve Richard Cordray’s nomination for Director of the Consumer Financial Protection Bureau.  The financial industry spends millions of dollars every year to have people looking out for their best interest in Washington.  American consumers deserve to have someone looking out for their best interest too.

 

Cuyahoga County Foreclosure Update: 2012

It’s a very long way from over

by Paul Bellamy, ESOP Director of Research and Development

There’s been a great deal of local and national media recently telling us the housing market is bouncing back and rampant home foreclosures are receding into a collective bad memory.  While this kind of positive housing coverage is understandable (we call it foreclosure fatigue), it misrepresents the actual situation facing residents of Cuyahoga County. In fact, in 2012 home foreclosures increased in Cuyahoga County by more than 5.3%.

So while the total number of foreclosure filings declined last year (blue bars), residential mortgage foreclosures increased from 9,405 in 2011 to 9,905 (red bars). Foreclosures are not always easy to measure, and few people understand the statistics that get bandied about in the press.

The home foreclosures that have caused so much pain, wealth destruction and displacement are in shades of blue in the pie chart below.  While they are the predominant type of foreclosure case in any given year, they are joined by tax foreclosures (yellow); commercial foreclosures (green); and “other” residential foreclosures, for example post-decree divorce or probate cases, (red).

Of the 12,847 foreclosure cases filed in Cuyahoga County in 2012,  3 out of 4 were the type of case we associate with the foreclosure crisis: a mortgage lender filing to attach a home and evict a homeowner in default on their loan. These are the cases that actually increased last year, but you are not likely to hear much about them from the mainstream media.

Unfortunately, the foreclosure crisis is still thriving in Cuyahoga County and many years from fully resolving.

Most “rip and read” media won’t point out that housing markets are very local and distinct by nature. California is not Ohio; Cuyahoga County is not Hamilton County; Cleveland is not Solon; and Kamms Corners is not Mt. Pleasant. Given how long this crisis has dragged on, we might have a vague sense that the worst of the foreclosure crisis happened in the city of Cleveland, and to a degree that is true.  Having more vulnerable, credit-starved neighborhoods set up the city to suffer the most damage from the rampant predatory and subprime lending that caused the crisis. However, in terms of the volume of cases filed in the last few years, the suburbs are “out producing” the city by a factor of roughly 2 to 1.

Predicting the next phase of this catastrophe is very problematic.  Students of the foreclosure crisis have noticed a changing mix of variables that have produced separate and distinct foreclosure “periods.”  Initially, it was the Predatory and Subprime loan Period, where the primary cause for loan defaults was the crummy loan itself.  That was followed by the Unemployment Period where the financial crisis devastated the American economy and household income loss was primarily driving defaults. Recently we have been in the Robo-Period.  Much of the industry’s filing volumes are related to the robo-signing scandal and national litigation against the mortgage servicers for the staggering amounts of perjury and forgery they committed pursuing foreclosure actions in the courts.

What seems evident is that it will take longer to clear the backlog of home defaults and foreclosures than it took to run up to the peak of the crisis. Foreclosures started climbing steadily as early as 1996 until 2003 and 2004. Then they spiked causing the crisis to hit early in Cleveland, and Ohio as well. But since leveling off in 2008, the decline in filings has been only gradual.

There are reasons to expect that it will continue that way. The banking industry has not been forced to account to shareholders for the staggering loss in value to these mortgages. So it’s in the best interest of the banks to stretch out the defaults out as long as possible before they have to recognize the inevitable loss and the hit to their balance sheets. Servicers don’t have strong incentives to move foreclosures quickly and lost notes, mortgages and defective assignments are still plaguing the system. Many filings don’t go to sheriff sale and the family stays in the home after the first foreclosure is dismissed. These households often slide back into serious default. Thus, many of the “new” cases are actually re-defaults and re-filings against the same homeowners.

Until the foreclosures clear, it is important to keep the grim reality of foreclosures front and center on the public agenda, notwithstanding the foreclosure fatigue that causes us to rely on the understandable wish for them to go away. They haven’t and won’t anytime soon and until then, will continue to hurt our communities, drain value from our homes and undermine our tax base.

Principal Correction Campaign

Why Principal Correction? Learn More

We remain at the forefront of the fight against Wall Street with our latest campaign geared at winning principal correction for nearly 14 million families across the country. The 2000’s saw the largest transfer of wealth from Main St. to Wall St. in American history. We believe that principal correction on mortgage loan balances is the only way to solve this problem that is both fair and economically sound.

Here are some ways you can get involved:

 

Yard Signs - Are you underwater on your home?  Do you OWE more than it’s worth these days?  Are you stuck paying for a house that’s never going to come close to returning the amount you’ve invested?  Then this is the fight for you! You can show your support by displaying a sign in your yard.  To request a sign contact ESOP’s Community Organizing Department at 216-361-0718.

 

 

 

 

HUD Fair Housing Complaints - On Tuesday, January 29th, 5 members of ESOP started a campaign calling on HUD to investigate Civil Rights violations in the housing market.  The group is charging that Ed Demarco, as acting Director of the Federal Housing Finance Administration, is discriminating against African-Americans by forcing them to bear an unfair brunt of lost home value.  By refusing to provide Principal Corrections to those in need, the FHFA and Ed Demarco are violating the Civil Rights of African-American home owners.  The group plans to file more complaints on a weekly basis, ultimately taking the claim straight to Washington D.C.

Bank Protests - By targeting FHFA Director Ed DeMarco and various corporate heads of the countries’ worst banks ESOP members and allies are putting pressure on key figures to do what’s right by our communities. The fight for principal correction is as bold and brazen today as the fight for interest rate reductions was 14 years ago.

Contact Raymond Cole, Community Organizer, at 216.361.0718 or rcole@esop-cleveland.org to find out how YOU can get involved in this historic fight.

ESOP in South Euclid

The City of South Euclid is working in cooperation with Empowering and Strengthening Ohio’s People to help homeowners in danger of foreclosure.  

If you or someone you know is like the 15% of South Euclid homeowners dealing with foreclosure or the threat of foreclosure, ESOP may be able to help.  We can walk you through various assistance programs and help you determine the best  way to get help with your mortgage.

All of ESOP’s services are free, and you can meet with us right in your own backyard. 

ESOP will conduct one-on-one sessions  with South Euclid homeowners right in City Hall, every Wednesday beginning in February.  To schedule an appointment, please call 216-361-0718.

 

ESOP is a HUD approved counseling agency, and has a proven track record of helping homeowners.  NEVER pay for foreclosure counseling or assistance.  Getting help from a HUD approved foreclosure counseling agency is a crucial first step.

 

Funeral Arrangements for ESOP Founder Inez Killingsworth

Funeral arrangements have been finalized for this week for the passing of ESOP Founder Inez Killingsworth.

Viewing

Thursday, 4:00 p.m. – 7:00 p.m.

Friday, 9:00 a.m. – 7:00 p.m.

Gaines Funeral Home

9116 Union Avenue

Cleveland, OH 44105

Wake

Saturday, 10:00 a.m. – 11:30 a.m.

Funeral

Saturday, 11:30 a.m.

Mt. Olive Missionary Baptist Church

3290 E. 126th

Cleveland, OH 44120

In lieu of flowers donations can be sent to:

Empowering and Strengthening Ohio’s People

3631 Perkins Avenue, Suite 4C-S

Cleveland, OH 44114

Memo: Inez Killingsworth

#MyHomeMyVote Town Hall

The foreclosure and housing crisis seems unending, especially for Ohio’s homeowners.
We have seen first-hand the damaging impact of predatory lending, a foreclosure epidemic, and underwater mortgages.

Across the nation, nearly a quarter of our homeowners owe more on their mortgage than their home is worth.  Estimates of the national “debt overhang” afflicting our housing markets range from $700 billion to over one trillion dollars.  Too many people in our country are bound to their mortgage lenders, preventing the rebound of the housing market and stalling an economic recovery.

With this in mind, Empowering and Strengthening Ohio’s People (ESOP) is hosting #MyHomeMyVote Town Hall, on Thursday, August 23, 2012, at 6:00 pm at Akron-Summit County Public Library at 60 South High Street, Akron, OH. We would like you to join us at this town hall event. We hope to unite homeowners from Ohio, state and local elected officials, and policymakers, to discuss this current situation and how we, as a country, can work together and rebuild our housing market.

ESOP would be honored to have you attend the #MyHomeMyVote Town Hall.

RSVP at: http://bit.ly/MuZc1E

If you have any questions, please feel free to contact Deonna Kirkpatrick, via email at dkirkpatrick@esop-cleveland.org  or by phone at 216-361-0718, at any time.

Thank you for your time and attention to these important matters.  We look forward to talking with you and hope to have you join us at the Akron Public Library. Directions to the location can be found at this link: http://www.akronlibrary.org/map_main.pdf .

Federal Housing Regulator Fails His Duty to American Homeowners and Taxpayers in Refusal to Correct Mortgage Principal

CLEVELAND, OH – Ed DeMarco has used shortsighted analysis and myopic perspective in his refusal to allow Fannie Mae and Freddie Mac to correct principal mortgage balances for millions of underwater homeowners.

“Once again Ed DeMarco is thumbing his nose at the vast number of economists, industry analysts, housing advocates and underwater homeowners who have made the economic case for principal correction,“ said Mark Seifert, Executive Director of Empowering and Strengthening Ohio’s People.

As acting Director of the Federal Housing Finance Administration, DeMarco has a duty to consider not only the dollars and cents effect of principal correction on Fannie Mae and Freddie Mac assets, but also the impact of FHFA policies on the overall housing market. DeMarco’s claim that the costs of principal correction outweigh the benefits is simply false. Any short term gains will never outweigh the benefits of righting the housing market with principal correction and putting the nation’s economy and its taxpayers on solid footing for the long term.

Nearly one in three U.S. homeowners is underwater, meaning they owe more on their home than it is worth. By all accounts the approximate $1 trillion dollar in negative equity is severely holding back a recovery in the housing market. Moreover, underwater homeowners are nearly twice as likely to face foreclosure as those with some home equity. This looming threat is the last thing we need as the second quarter of this year has already seen a spike in foreclosure filings across much of the nation.

The mostly rehashed discussion in DeMarco’s letter to Congress and supporting documents is full of references to borrowers, strategic defaulters, Fannie, Freddie, investors, servicers and more, discussing the upsides and downsides for parts of the country. Yet FHFA never seems to consider what’s right for the long suffering, debt-oppressed American people.

DeMarco has the opportunity to be more than an accountant. He has the chance to be a real leader by helping repair the damage of the housing crisis and restore a healthy, stable and accessible housing market for all Americans. Instead his failure to act leaves the housing market stalled and homeowners shackled to debt for which there is no underlying value.

ESOP urges DeMarco to reconsider his refusal to correct mortgage principal and the continuing harm caused by his inaction.

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Local Housing Counseling Agencies Deliver FREE Help to Struggling Homeowners

Foreclosure Prevention Events Planned Throughout Northeast Ohio

CLEVELAND, OH – June is National Homeownership Month.  Yet the foreclosure crisis has made homeownership a fragile prospect for many families across northeast Ohio.

In April there were more than 2,000 homes in foreclosure in Cuyahoga County alone.  That is why local housing counseling agencies want to remind homeowners that there is FREE help available to help them hold on to their American Dream.

Throughout the month of June struggling homeowners can get free advice and assistance from local HUD-approved, non-profit foreclosure prevention counselors at special foreclosure prevention outreach events.

Euclid

June 12, 4-8:00 p.m.

Euclid Library

631 East 222^nd Street

Euclid, OH 44123

South Euclid

June 14, 4-8:00 p.m.

Community Center

1370 Victory Drive

South Euclid, OH 44121

Parma

June 19, 4-8:00 p.m.

Senior Center

6611 Ridge Road

Parma, OH 44129

Lakewood

June 21, 4-8:00 p.m.

University of Akron Lakewood

1415 Warren Road

Lakewood, OH 44107

Garfield Heights

June 26, 4-8:00 p.m.

Word of

Righteousness

Family Life Center

13455 Dressler Ave

Garfield Heights, OH 44125

Whether they’ve lost their job, suffered an illness, death of a spouse or some other form of financial difficulty there is often a way to keep borrowers in their home.  At the events they can sit down and talk one-on-one with local counselors who are trained to help them find the right solution for their individual needs.  Services offered will include:

• Foreclosure prevention counseling
• Homebuyer education
• Financial counseling and education
• Delinquent property tax solutions

In addition to housing counselors, representatives from the following lenders will be on hand to assist customers directly:

• JPMorgan Chase
• PNC Bank
• First Federal of Lakewood
• Fifth Third Bank
• Wells Fargo
• Bank of America

No appointment is necessary and all counseling services are absolutely free.

In order to get the most out of their visit to the foreclosure prevention events homeowners are recommended to review the attached document checklist and bring materials to help counselors and lenders determine for which programs they qualify. Documents include proof of income, expenses, taxes and insurance, mortgage and bank statements.

For more information about the foreclosure prevention events, the services available and local housing counseling agencies homeowners can contact any of the agencies listed below or call United Way 2-1-1 First Call for Help.

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Neighborhood Housing Services of Greater Cleveland

216-458.HOME (4663)

Cleveland Housing Network

216-881-8443

Community Housing Solutions

216-921-9100

Empowering and Strengthening Ohio’s People

216-361-0718

Home Repair Resource Center

216-381-6100

Homeowner Document Checklist

We cannot accept original documents. We cannot make copies for you. You must provided single sided, unstapled copies of each document listed.

 

Income

• Paystubs showing year to date earnings for all jobs for the last eight (8) weeks for all wage earners living in the home
• Unemployment insurance benefits
  • Determination of Unemployment Compensation Benefits document from ODJFS (initial award letter) with benefit year beginning and ending dates
  • Last 8 weeks of Unemployment Benefit Payment statements and/or payment summary from ODJFS
• Most current Social Security and/or pension award letters
• Most current food stamp verification
• Alimony/child support payment verification
• Self-employed and/or landlords
  • Profit/loss statement for past 6 months—signed and dated
  • Signed lease agreement

Federal income taxes

• Filed federal 1040s (signed) and all schedules from most recent 2 years
• W-2s and 1099s for past 2 years

Property tax and homeowner insurance

• County property tax bill or tax bill summary from county auditor’s website for current year
• Declarations page of your current homeowners insurance policy

Mortgage

• Most recent monthly statement from your mortgage company
• If you are in foreclosure please request a Reinstatement Letter (states past due balance) from lender or lender’s attorney
• Mortgage (filed with your county recorder)—this is the document that secures your house as collateral that was signed when you closed on your loan.  At a minimum, we need the following 3 pages:  first, signature, and that which contains the legal description of the property

Bank Statements

• All pages (even if blank) of last 2 months checking and savings account statements.  Statements must include name, address, account number, account type, statement period date, and deposit transactions
  • If you do not have a checking account you must provide a signed statement indicating this
• Self-employed and/or landlords
  • Most recent 6 months business and personal checking and savings—all pages (even if blank)

Utility Bill

• Current gas or electric bill (all pages)

Hardship

• Hardship Letter—a brief, signed, dated, and detailed account of what event(s) occurred that has resulted in your inability to maintain your current mortgage payment
• Documents verifying event(s) which created hardship e.g., medical bills, divorce decree, disability determination, etc.

Bankruptcy

• Reaffirmation Agreement–If you filed a Chapter 7 Bankruptcy and reaffirmed your current home loan
• Notice of discharge of  Chapter 7 and/or 13 bankruptcy filings which were filed after loan was closed

Restoring Stability application

•  Complete and print the PDF generated by the website.  Spouse’s information must be included and they must sign all documents, even if he/she is not a co-borrower.   Go to http://www.restoringstability.org for information and to begin.

Loan origination documents—if available

• HUD-1 Settlement Statement
• Truth-in-Lending Disclosure
• Good Faith Estimate

No more excuses!

For Immediate Release
March 23, 2012

For More Information Contact:
Deonna Kirkpatrick
(216) 361-0718 or (216) 296-0363
dkirkpatrick@esop-cleveland.org

No More Excuses!
Underwater Homeowners Demand Principal Reduction

CLEVELAND, OH – Today a startling new report revealed that even the nation’s mortgage giants Fannie Mae and Freddie Mac agree that reducing principal balances on underwater mortgages will help families and communites while saving taxpayers money. (Link to report)

So why won’t they do it? The decision rests with Edward DeMarco, the acting director of the FHFA, who has refused to allow it, claiming it’s bad business. Now his own employees’ analysis proves that’s not the case.

No more excuses!

Today underwater homeowners and neighborhood leaders from across northeast Ohio will board buses and take their message to a local bank, demanding serious action on principal reduction.