You Need to Work at Least 67 Hours a Week to Afford Rent While Making the Minimum Wage

Image via National Low Income Housing Coalition (NLIHC)

It’s widespread knowledge that the minimum wage has stagnated and not kept up with the cost of living anywhere in the United States. But most people don’t realize just how bad it is. The National Low Income Housing Coalition has calculated how many hours a week a minimum wage worker would have to work in each state to afford a two-bedroom apartment at fair market rent and found that you’d have to work at least 67 hours a week. In more than half the states, you’d have to work more than 80 hours a week. In the most expensive state, Hawaii, you’d have to work 177 hours a week—yes, more hours than actually exist in a week.

See the full map, with state-by-state numbers.

Reposted from AFL-CIO NOW

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Making it on Minimum Wage “More of Us Should Live on What We’re Asking People to Do”

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Surfing a rental housing website for low-cost apartments in her district on the south side of Minneapolis, State Rep. Karen Clark didn’t find much to choose from. Not much that was very appealing, anyhow.

“It looks like a little box. It’s weird looking,” said Clark, checking the photo of a house for rent from her office in the state capitol. In her price range — $375 a month while she is living on the Working America Minimum Wage Challenge — she wouldn’t be renting the whole house. Just one room is available — in a shared house with three adult men.

“It would be very discouraging,” she says. To live in shared housing, she says, “I would have to go back to my early days out of school; that’s what I did when I got out of college. If I had children, I wouldn’t be able to do it.”

Clark and four other Minnesota legislators — Reps. Frank Hornstein (Minneapolis), John Lesch (St. Paul), Jason Metsa (Virginia) and Shannon Savick (Wells) — have accepted the Minimum Wage Challenge. To help educate their colleagues as the legislature debates raising the state’s minimum wage to $9.50 an hour, they’re living this week as if they earned the current minimum of $7.25 an hour. That translates to $15,080 a year, or $1,256 a month. A standard housing budget is 30 percent of income, leaving Clark and her colleagues $375 to find a place to live.

At that price, there aren’t many options. “I can tell you that two years ago, in order to rent a two-bedroom apartment in my district, you had to have an income of $17.25 an hour,” says Clark. “It may have changed some, but it hasn’t gone down.”

Coping with adult roommates is only one of the challenges facing those with a minimal budget for shelter. “Some of the housing that’s available is not appropriate for children. It has a lot of lead paint. That’s very toxic for toddlers,” says Clark, who worked as a nurse practitioner before she was elected to the legislature.

In addition to raising wages, she says, Minnesota needs to invest more in affordable housing. “We have around 20,000 homeless people, and half of those are children. We have waiting lists for public housing. We know how to make housing affordable — you can use land trusts — but it costs money.”

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Money is one thing Clark doesn’t have much of this week. Her food budget is just $35 a week. “I had a good breakfast,” she says. “One egg and toast, with a little extra olive oil. I think that was helpful.”

“I’m not suffering,” she is quick to point out. But Clark also has noticed “being on the edge of hunger” more than a few times. How does she cope? “Drinking more water,” she says, with a chuckle. “If I’m hungry, I’ll have a big glass of water.”

“It’s both inspiring and challenging,” says Clark, to learn what life is like for those living on minimum wage. “It increases my resolve, and I look forward to passing that law” to give low-wage workers in Minnesota a raise to $9.50 an hour. “I do think more of us who are making that kind of decision should live on what we’re asking people to do. I think that would open some eyes.”

Take action now and help raise Minnesota’s minimum wage to $9.50.

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Obstruction Loses! American Homeowners Win! The End of the DeMarco Era.

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Sometimes, small changes can have big impacts.

If the debate over the Senate’s parliamentary procedure in the case of presidential nominations made you want to take a long snooze, no one would blame you. But thanks to new Senate rules, a minority of senators can no longer block a presidential appointment for no reason without standing up and saying why.

And thanks to this long-awaited rules change, the Federal Housing Finance Agency (FHFA) has its first new director since the Bush Administration: former North Carolina Rep. Mel Watt.

Democrats have taken advantage of their weakening of filibusters and muscled through the Senate President Barack Obama’s pick to lead a housing regulation agency.

By 57-41 Tuesday, senators confirmed Rep. Mel Watt to lead the Federal Housing Finance Agency.

Obama nominated the North Carolina Democrat in May but he’s been in limbo ever since. Republicans have said he’s not qualified, while Democrats say the 21-year House veteran has the needed experience.

Until Tuesday, Watt’s nomination was blocked because Democrats needed 60 Senate votes to end a GOP filibuster. But last month, the chamber’s majority Democrats lowered that threshold to a simple majority.

Here’s why this is a big deal for American homeowners:

Since Republicans in the Senate wouldn’t allow a fair vote on a new FHFA Director, we were stuck with Bush’s guy: Ed DeMarco. DeMarco was a longtime opponent of government efforts to help homeowners affected by Wall Street’s brazen fraud and abuse. Specifically, DeMarco opposed the practice of “principal reduction,” encouraging banks to rewrite mortgages for underwater homeowners. Time after time, he rejected proposals from the Obama Administration to lend this kind of assistance to struggling people who had lost their homes or were about to lose their homes.

“I don’t know what DeMarco’s specific legal mandate is,” wrote economist Paul Krugman, “But there is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy…This guy needs to go.”

DeMarco continued his harmful policies to the very end:

DeMarco was so extreme that he even opposed allowing lenders to sell foreclosed homes back to the previous owners, even if they had been victims of predatory loans and even if they made the best offer to purchase the house. Realizing that Watt would soon be sitting in his seat, DeMarco — on the eve of the vote to confirm his replacement — put into place mortgage fees that punish homeowners in states that have enacted strong protections against foreclosure abuses.

Rarely does one person stand in the way of relief for so many. But DeMarco was that guy. And now he’s gone.

Housing and community groups have high hopes for new Director Watt, a member of Congress who supported the creation of Elizabeth Warren’s Consumer Financial Protection Bureau (CFPB) and worked to get anti-predatory lending provisions into the 2010 Dodd-Frank Wall Street reform bill.

Photo by @CVHaction on Twitter

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Time’s Running Out for Congress to Act on Vital Issues

With the end of the legislative session looming, here’s a look at some of the key working family issues still on the congressional agenda.

Budget

The Republican shutdown of the government in October cost the economy 120,000 jobs and just under $24 billion. The agreement to end the shutdown funded the government through Jan. 15, but at the sequestration levels that have strangled job growth and slowed the economy, and included a debt ceiling increase through Feb. 7.

The deal also called for a House–Senate budget conference committee to try to reach a longer term budget agreement by Dec. 13. House Republicans are continuing their demands to cut Social security, Medicare and Medicaid, along with tax breaks for corporations.

The AFL-CIO is calling for the repeal of the sequester, which could create nearly 800,000 jobs, according to the Congressional Budget Office. Also lawmakers must oppose any cuts in Social Security, Medicare or Medicaid benefits, including means-testing or reducing annual cost-of-living increases by moving to the so-called “chained CPI.” Social Security benefits should be improved, not cut; working people and retirees need more economic security, not less.

Instead of further austerity measures, Congress should invest in jobs and education by raising revenue from Wall Street and the wealthiest 1%. Repealing tax subsidies for sending jobs overseas, for example, would generate $583 billion over 10 years.

Immigration Reform

In June, the Senate passed a bipartisan immigration reform bill that included a path to citizenship. In October, a House bill (H.R. 15) modeled on the Senate measure was introduced with Republican co-sponsors. Congressional observers believe there are at least two dozen other Republican legislators who would support the bill if it came to a vote.

But this week, House Speaker John Boehner (R-Ohio) broke his promise to hold a House vote on immigration reform legislation. AFL-CIO President Richard Trumka called Boehner’s action “unconscionable” and said:

The AFL-CIO will not give up this fight until comprehensive immigration reform is passed in the Congress. If Boehner’s House Republicans continue to block the way, we intend to make it clear that the Republican Party will pay a price at the ballot box for ignoring America’s growing immigrant community.

Workplace Discrimination

Earlier this month, the Senate overwhelmingly passed (64–32) the historic Employment Non-Discrimination Act of 2013 (ENDA). The bill would make it illegal for employers to discriminate against workers based on their sexual orientation or gender identity. Currently, 29 states allow workers to be fired for being gay and 33 allow workers to be fired for being transgender.

But even though the Senate version passed with bipartisan support and the House ENDA bill includes Republican co-sponsors, Boehner again caved to the extremist tea party wing and said he would not allow a vote on the bill.

Minimum Wage

The federal minimum wage has been stuck at $7.25 an hour since 2009. Shortly after the Thanksgiving holiday, the Senate is expected to take up a bill (S. 460) to increase the minimum wage to $10.10 over three years and index it to inflation. It also would raise the minimum wage for tipped workers, which is currently $2.13 per hour, to 70% of the regular minimum wage.

Among workers who would benefit from a minimum wage increase, 88% are adults older than 20; 55% percent are women; and their earnings account for half of their family’s entire income.

Even though 80% percent of the public, including 62% of Republican voters, support increasing the minimum wage, according to a recent poll conducted by Hart Research, Boehner likely will block any House vote.

Unemployment Insurance

If Congress doesn’t extend the current extended federal unemployment insurance (UI) program by the end of the year, 1.3 million jobless workers will be cut off from UI the week of Dec. 28. Nearly 1.9 million more would lose the extended UI during the first half of 2014 as their state benefits run out. The current program, last extended in January 2013, provides up to 47 weeks of federal benefits in states with the highest unemployment rates on top of the normal 26 weeks that most states provide.

With the economy still 2 million jobs in the hole after the Great Recession and with 37% of the unemployed out of work for more than six months, inaction would be disastrous.

Retirement Security

Last month the House passed a bill (H.R. 2374) that would delay and could ultimately thwart the U.S. Department of Labor’s effort to protect workers’ retirement security. The Labor Department wants to close loopholes and update the rule that protects workers from deceptive or abusive practices when they seek investment advice about their retirement savings.

In a letter to House members, AFL-CIO Government Affairs Director William Samuel says, “The intent behind this bill is to delay the commission rule and thereby also block [the Labor Department] from carrying out its statutorily required responsibilities.” He adds:

This bill affects all workers who are trying to save for their retirement. The primary way most working people invest in the capital markets is with their retirement savings—frequently their biggest financial asset. They are counting on making the most of their money when they seek investment advice; they are counting on that advice being free from conflicts of interest. That is what is at stake here.

So far the bill has no Senate sponsor.

Nominations

Earlier this year with Senate Democrats on the verge of changing Senate rules to block filibusters on executive branch nominees, Senate Republicans relented on their obstruction tactics that have blocked votes on several of President Barack Obama’s nominees.

But after eight Republicans crossed party lines to end a filibuster against Richard Griffin, the former National Labor Relations Board member nominated by Obama to serve as the NLRB’s general counsel, the nomination process once again ground to a halt.

On Oct. 31, Republicans blocked an up or down vote on Rep. Mel Watt (D-N.C.), the first African American to be nominated to chair the Federal Housing Finance Agency. Watt is also the first sitting member of Congress to be rejected by the Senate since 1843.

Republicans also have vowed to block all three of President Obama’s nominees to the U.S. Court of Appeals for the District of Columbia Circuit. On Oct. 31, Republicans prevented an up or down vote on the nomination of Patricia Millett, and on Nov. 12, they voted to continue the filibuster against the nomination of Nina Pillard. Republican leadership is also expected to block the nomination of the third Obama nominee, Robert Wilkins, who is currently sitting on the U.S. District Court for the District of Columbia.

The District of Columbia Circuit is considered the most important court beneath the U.S. Supreme Court because most cases dealing with federal regulations and federal enforcement agencies can be appealed there, including decisions and regulations issued by the National Labor Relations Board, the Occupational Safety and Health Administration and the Environmental Protection Agency.

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Increasing the Minimum Wage Would Boost the Housing Market: A Firsthand Account

This week, Minnesota Rep. Jason Metsa is taking the Working America Minimum Wage Challenge – living on the minimum wage of $7.25 an hour. He’ll report his experience back to the Minnesota legislature, where they are considering a bill to raise the minimum wage to $9.95.

On Wednesday, Rep. Metsa’s challenge was to find a place to live. Why a challenge? His budget that he set out on Monday allowed for only $359 a month for housing.

Metsa researched apartments both in the St. Paul/Minneapolis area (close to work) as well as up north in Virginia, MN (where he is from).

What he found was that it is very time consuming and almost impossible to find a place for that amount.

First off, there were not many listings available. Listings that did fall in Metsa’s budget didn’t have phone numbers available, so he had to inquire mostly through email. Many low-wage workers can’t afford an Internet connection at home or don’t own a personal computer. If Metsa was really living on minimum wage, he might have had to do this research at a local library, if he was in an area where there was one. And of course, there’s the issue of time and transportation.

Metsa did find the option to be a roommate for $323 in a house in Minneapolis, one of the few metropolitan locations in his price range. When he looked in Virginia, MN his home town he found an apartment listing for $100 a month. He called to follow up, and learned that if he wasn’t on housing assistance the one bedroom apartment was $585 a month with a $250 deposit for the utilities.  Most of the utilities were included except electric, and the apartment was heated on electric heat. And if you’ve ever been to Virginia, MN, you know that heating bills run high.

As a test, we recalculated Metsa’s housing budget if the legislature successfully passed the minimum wage increase to $9.95. The new housing budget was $490: this gave us a dozen more options with legitimate phone numbers to call, actual property managers to speak to, pictures of the apartments, and better locations.

Rep. Metsa’s initial reaction was how time consuming this was. Because there were so few options, 45 minutes of research and following up could get him nowhere. At a public library the limit at a computer is 30 minutes – sometimes up to an hour – which meant that a round trip to the library to find housing could all be for naught.

“If I was really on minimum wage, I’d have to rely mostly on friends and family on what house they knew about or even canvass the neighborhood looking for ‘For Rent’ signs and hope some of them were in your price range,” Metsa said. “It’s clear that you wouldn’t be able to find housing without assistance of some sort with $359 a month.”

“What I’m really learning from this challenge is that on minimum wage, it’s a constant juggle of what I don’t pay this month,” Metsa continued. This lines up with a lot of the comments we hear from Working America members who work low-wage jobs.

Thursday, Rep. Metsa will meet with small business owners and low-wage workers to talk about their experiences. Follow along on Twitter by using the hashtag #mnwage.

See more photos on Facebook here.

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Statement by AFL-CIO President Richard Trumka on FHFA Acting Director DeMarco’s Decision to Deny Homeowners the Opportunity for Principal Reduction

The following is a statement from AFL-CIO President Richard Trumka.

We are deeply disappointed by today’s announcement by Federal Housing Finance Agency Acting Director Edward DeMarco that he will continue to prohibit Fannie Mae and Freddie Mac from participating in the Obama Administration’s mortgage principal reduction program.  DeMarco’s decision is irresponsible.

As Treasury Secretary Tim Geithner has observed, providing principal reduction for struggling homeowners is also in the best interests of taxpayers. The Federal Housing Finance Agency’s own analysis has found that participating in the program could save $3.6 billion for Fannie Mae and Freddie Mac and $1 billion for the taxpayers.

The combination of a real estate bust, high unemployment, and falling real wages has created the perfect storm for homeowners.  Millions of working families owe more on their mortgages than their homes are worth.  The U.S. economy cannot recover until decisive action is taken to address the housing and foreclosure crisis.

Principal reduction is the most effective way to prevent foreclosures, stabilize housing prices, and get our economy working again.  By refusing to allow Fannie Mae and Freddie Mac to engage in principal reduction, DeMarco will deny relief to as many as half a million struggling homeowners.

Despite today’s setback, we will continue to work with the Obama Administration to fight to make assistance available to struggling homeowners.  We need federal housing policies that will help make it possible for working families to own their homes, not short-sighted polices that protect the interests of bankers and Wall Street.

 

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Good News: California Takes a Stand Against Foreclosure Fraud

In the years since the vicious, recession-inducing collapse of the housing market, we’ve learned more and more about the irresponsibility and bad practices that caused the bubble and the crash. The banks and the mortgage-servicing industry abandoned all reasonable standards in their rush to turn people’s homes and debts into the equivalent of casino chips—and the consequences have been enormous.

Fortunately, California has taken the strongest step yet to hold financial institutions accountable for their wrongdoing and protect people from illegal foreclosures. Yesterday the state legislature passed a “Homeowners’ Bill of Rights,” which would give homeowners more power in facing the institution that holds their mortgage. The state’s Attorney General, Kamala Harris, sponsored the bill. The provisions include making sure homeowners have one point of contact and can’t get foreclosed while they’re pursuing a loan modification, stronger penalties for “robo-signing” of loans, and increased rights for homeowners to sue banks if they’ve been the subject of violations. (David Dayen, a Californian who follows this issue closely, has more analysis.)

The new law builds off of the multi-state mortgage fraud settlement negotiated this spring, but goes considerably farther. Critically, it actually provides a deterrent to bad practices by banks and mortgage servicers.

The biggest factor in the foreclosure crisis is the uncertainty that comes from a mix of shoddy paperwork, careless repackaging and resale, and dramatic decline in housing values. In many cases, people are paying much more than their home is worth and they don’t even know who owns their mortgage. Many people who are facing foreclosure or eviction have done everything they thought was required of them, and a wave of local, grassroots activism has sprung up to combat unfair foreclosures.

California’s move comes at a time when national politics is losing focus on this crisis. Foreclosure hurts not just families who might lose their home, but also their neighbors and the economy generally, and yet we still haven’t done enough to fix what’s wrong. “There has been no shortage of good ideas, what has been lacking is will,” says law professor Jean Braucher, who says that there’s a sense of “foreclosure fatigue” among Washington policymakers. Well, people in neighborhoods riddled with evictions are getting tired of it, too.

What should really happen is principal reduction—the banks and servicers who hold mortgages should write them down so that people are paying based on what their house is worth now, not at the height of the bubble. The fact that people are having trouble paying for their homes is a big drag on our economy and principal reductions would help give it a boost.

Still, California’s move to increase the power of homeowners is a big step in the right direction. We need to make sure the financial industry is doing its job, and that means putting real penalties on misconduct and giving it the incentive to help people stay in their homes. California is the biggest housing market in the country, and this new law should be a model for other states. Harris, and the grassroots activists who pushed for tougher laws on mortgage fraud, should be commended.

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Arizona Pulls a “Scott Walker” With Funds Meant for Struggling Homeowners

Arizona Governor Jan Brewer and her allies in the state legislature are seeking to use millions of dollars intended for struggling homeowners to pay for prison construction and tax cuts instead, echoing a policy put in place earlier this year in Wisconsin by Governor Scott Walker.

Remember the $26 billion foreclosure settlement, the one agreed upon by the five biggest banks and 49 state Attorneys General? As one of the hardest hit states, Arizona is getting $1.6 billion, as well as an additional $97.7 million to be overseen by the office of Attorney General Tom Horne, to be used for “housing counselors, legal aid, hotlines, and to help stressed homeowners with their payments.”

Two main things to understand about these funds: they are wildly insufficient given the scale of the problem, but all the same they are extremely crucial. In March, Arizona had the highest foreclosure rate in the country, according to RealtyTrac, with 9,497 foreclosures. If any state needs all the help it can get when it comes to homeowner education, assistance, and relief, it’s Arizona.

Even so, Governor Brewer and Republican state legislators want to siphon $50 million from those funds to “relieve pressure on the budget.” So in other words, use money intended to help homeowners for…other things.

Lawmakers say the money amounts to a pricey outreach and education fund. It won’t hurt to take half of it, House Speaker Andy Tobin said.

“We’re using the funds to relieve the pressure on the budget,” said Tobin, R-Paulden. Those stresses range from a push to replace welfare dollars lost to federal budget cuts to prison construction, he said.

How is this justified? You can thank a loophole in the settlement language, which says the funds can be used “to compensate the state for costs resulting from the alleged unlawful conduct of the defendants.” Arizona lawmakers like House Speaker Tobin are claiming that since foreclosure fraud hurt homeowners, which in turn hurt tax revenues and by extension the state budget, they can use the money for whatever they damn well please.

They can make this logical jump without acknowledging a.) that the big banks committed any actual fraud, or b.) that maybe Gov. Brewer’s $538 million tax handouts to businesses has anything to do with budget problems.

What’s scarier is that this move by Arizona is not unprecedented. They are doing exactly what Gov. Scott Walker already did in Wisconsin.

In February, Walker and Attorney General J.B. Van Hollen decided to use $25.6 million of Wisconsin’s share of the foreclosure fraud settlement to plug holes in his state budget. For justification, he used the very same loophole in the settlement language:

“Just like communities and individuals have been affected, the foreclosure crisis has had an effect on the state of Wisconsin, in terms of unemployment. . . . This will offset that damage done to the state of Wisconsin,” Walker said.

A week later, Missouri followed suit, taking $40 million from their share for the state’s general fund. Ohio decided to allocate $75 million meant for homeowner assistance to actually demolish vacant homes. South Carolina legislators insidiously pushed for using $31 million of settlement funds for corporate tax breaks.

Of all the horrific policies that have come out of the offices of governors like Walker in the past two years, this is one of the worst – and the most under-reported. With Walker and Brewer giving out huge tax handouts to businesses, cutting services and education, and then dipping into foreclosure fraud assistance to pay for their bad decisions, they are no different than a modern day Bonnie and Clyde. Robbery in multiple steps is still robbery, even if you’re a governor.

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When A Veteran Is More Scared of the Housing Crisis Than War

In Ohio, over 482,000 homes are “underwater,” meaning the value of those homes is less than the amount owed to the bank in mortgages. The values of those underwater homes total a whopping $14,943,488,000, or almost $15 billion.

Even though it rarely breaks through the noise of national debate, the mortgage crisis continues to be an enormous drag on our economic recovery. AlterNet estimates that homes in the U.S. lose $500,000 of value every hour, and there are thousands of foreclosure actions taken every day.

In the Cleveland area, there was recently some controversy about a foreclosure prevention event planned for the summer. An article in the Cleveland Plain Dealer detailed the disagreements between the various organizations involved, but skipped over the enormity of the crisis facing homeowners in Ohio and nationwide.

In this context, Working America member and Vietnam War veteran Michael Lime wrote a letter to the editor of the Plain Dealer titled “Struggling homeowners need more than unreasonable mortgage modifications”:

I don’t know anything specifically about the Neighborhood Assistance Corp. of America (“Out-of-town foreclosure aid group has local critics,” Thursday), but I do know the importance of having real help for struggling homeowners. I believe the housing crisis is a significant stumbling block to real economic recovery.

As a small-business owner, I certainly felt the crush of the economic downturn. Although there has recently been a slight pickup in business, the sustained slowdown meant I fell behind on my mortgage payments. I was contacted by a group supposedly trying to help; of course, they required money up front but failed to do anything tangible. I ended up on the brink of foreclosure and accepted a loan modification that added thousands of dollars and 25 years to my mortgage — on a house worth half of what it was worth prior to the recession. I’m still not sure how I’m going to make it.

I am more scared now than I was while serving in Vietnam. We need real mortgage relief for people in my situation — not the drop in the bucket of the recent settlement. Groups that actually help struggling homeowners, not take advantage of them, are critical, too. Otherwise, the housing crisis will continue to weigh down the U.S. economy.

Michael Lime, Avon Lake

As we’ve written before, the $26 billion foreclosure fraud settlement reached with the biggest banks barely scratches the surface of the nearly $700 billion problem. In addition, the Acting Director of the Federal Housing Finance Agency Ed DeMarco could singlehandedly act to resolve the mortgage crisis by reducing the principal on underwater mortgages.

For Michael Lime and millions of others, take action. Tell Ed DeMarco to address the mortgage crisis, or step aside for someone who will.

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Agency That Wall Street Did Not Want Announces Changes To Mortgage Industry


CFPB Director Richard Cordray in 2008

The Consumer Financial Protection Bureau (CFPB), the agency created as part of the 2010 Wall Street reform bill, announced yesterday plans to change the way the mortgage servicing industry interacts with consumers.

“For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress,” said CFPB Director Richard Cordray. “It’s time to put the ‘service’ back in mortgage servicing.”

The Hill reports on the proposed changes:

Under the CFPB’s proposal, if a homeowner gets behind on their mortgage and is facing foreclosure, the servicer would be required to make a “good faith” effort to contact the borrower and explain the foreclosure process, as well as provide counseling options.

Remember all foreclosures that were approved through “robo-signing?” That means the banks didn’t verify the paperwork – or even check if they technically owned the property – before starting the process of foreclosure.

The CFPB is also considering requiring servicers to have staff dedicated to working with struggling borrowers either facing foreclosure or trying to avoid it. These employees would have easy access to the borrower’s records, as well as the ability to determine if a loan modification could be pursued to avoid foreclosure. A common complaint by struggling borrowers was their inability to discuss their plight with an employee with their servicer.

Right, because a discussion with the servicer might result in the bank having to check their records to see if the seizure of a home was, what’s the word, legal.

Homeowners and policymakers were also frustrated by error-ridden documents at many servicers. Under the CFPB’s plan, servicers would have to address found errors within 30 days, or an even shorter timeframe if a foreclosure or payoff is at stake.

Our response to all of this? Fantastic, and long overdue. And we can’t help but remember how savagely Wall Street and their political allies in Congress fought the creation of this agency, the appointment of its originator Elizabeth Warren as its director, and then again the appointment of Richard Cordray. Now we know why – Cordray is arming consumers with the ability to fend off these long-accepted predatory practices.

The dirty secret about our economy right now is the enormous drag of foreclosures and the inability of homeowners to modify their loans. Sure, there was that much-trumpeted national foreclosure settlement, which resulted in $26 billion in assistance for struggling homeowners. But there were two big problems with that settlement: 1.) you can’t fix $700 billion in negative equity with $26 billion and 2.) in some states (like Wisconsin) anti-worker corporate-backed governors (like Scott Walker) took that money and used it to pay for tax breaks, so homeowners didn’t actually get any of it.

Needless to say, the so-called settlement did very little to alleviate the enormous economic pain felt by homeowners stuck in mortgages with no recourse, owing more to banks and servicers than they could possibly come up with, even if they sold their house.

Edward DeMarco, the acting director of the Federal Housing Finance Agency (FHFA), singlehandedly has the authority to reduce the principal on underwater mortgages. This would help families pay for mortgages that cost more than their house is worth. Two weeks ago, the Treasury Department offered to subsidize this process – but still no movement from DeMarco.

We’re very encouraged by what the CFPB is doing to protect future consumers, but we need to urge DeMarco to act – and help those who are struggling now. Sign our petition today.

Photo of Ohio Attorney General Richard Cordray from aflcio on Flickr, via Creative Commons.

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