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CBCF keys in on Mortgage Crisis

POSTED: September 26, 2008, 12:00 am

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The Congressional Black Caucus Foundation (CBCF) held a National Town Hall Meeting on the mortgage crisis before a large audience in the Walter E. Washington Convention Center. Marc Morial, president and CEO of the National Urban League and the former mayor of New Orleans was the panel’s moderator. The session was opened by the co-chair of the 2008 ALC, Rep. Gregory Meeks of New York.

Prior to the start of the Town Hall Meeting ALC co-chair Rep. Corrine Brown (D-FL) welcomed the audience and informed them that Rep. Barney Frank (D-MA), who had taken a seat on stage, would provide an update on negotiations over President Bush’s $700 billion bailout proposal. Frank, who heads the Financial Services Committee in the House of Representatives, was en route to a meeting at the White House on the President’s plan. had an exclusive interview with Rep. Barney Frank that can be seen on NStv. Rep. Frank made clear that Democrats on the Hill were working to insure that there were provisions in the bill being proposed by the White House and took a swipe at Republican presidential nominee Senator John McCain for “politicizing” the financial crisis.

Joining Morial on stage for the first panel were Rep. Maxine Waters (D-CA), Kenneth Wade, CEO of NeighborhoodWorks America; Lee Bowman, National Coordinator for Community Affairs with the Federal Deposit Insurance Corporation (FDIC); Rep. Sheila Jackson Lee (D-TX); Eric Eve, Vice President, Global Community Relations for Citi Bank; Franklin D. Raines, Vice Chairman of the Board of Revolution Health Group LLC and former chairman and CEO of Fannie Mae; Lawrence Parks, Senior Vice President for External and Legislative Affairs for the Federal Reserve Bank; Stacey Tisdale, journalist and author; and Mary Lee Widener, President and CEO of Neighborhood Housing Services of America (NHSA). A second panel included the Hon. Cedric B. Glover, mayor of Shreveport, Louisiana; Hon. William Bell, mayor of Durham, North Carolina; and Marcia Griffith, founder and president of Home-Free USA.

Rep. Waters addressed the issue of fault and assigning blame for the current debacle noting “there is a little blame to go around for everybody.” The California congresswoman added, “African Americans and whites with the same incomes and credit histories approached financial institutions, and the subprime mortgage is the one that was extended to African Americans; the one that is 1, 2, or 3 points higher than prime.”

The issue of race and the disproportionate impact on Black homeowners was also a prominent point of the discussion. Rep. Waters acknowledged that race was a factor in the fallout in the mortgage market but also said, “We had brokers on the street who look like us, who took these toxic products and sold them to our people.” The congresswoman also pointed out that 40 percent of all mortgages in East Cleveland are in foreclosure, with most of the foreclosed homeowners being African American.

Much of the discussion during the Town Hall Meeting centered on the need for relief for homeowners who have been directly impacted by the mortgage crisis. Franklin D. Raines, who once led Fannie Mae and was OMB director during the Clinton administration, suggested that one remedy that should be included in any bailout plan is a provision to provide a direct grant of $10,000 from not-for-profit organizations to individuals facing foreclosure. Rep. Sheila Jackson-Lee (D-TX) alluded to the current negotiations with the White House and her belief that the legislation should include protections and options for homeowners in foreclosure. “One of the holding points in the negotiation,” remarked Jackson-Lee, “is the need to have a provision to allow homeowners to go into bankruptcy court, declare bankruptcy, and have the bankruptcy courts reorganize finances to save their homes.”

A point that many of the panelists made was that the burden should not be on the homeowner, no matter if poor choices were made when the mortgage was executed. Still, Eric Eve of Citi Bank reminded the audience that banks have no interest in seizing homes and having the properties in their inventory. He stressed that homeowners facing foreclosure must be proactive in trying to secure support from the proposed bailout. Eve suggested, “You have to come to me, Citibank or Bank of America, or whatever. You have to hold us accountable. You have to ask what’s in this for me.”

Journalist and author Stacey Tisdale took a different tact when reflecting on issues of accountability for consumers and the role of public education on personal finance. Tisdale, who regularly reports on business issues for several media outlets, was adamant that education efforts on personal finance must start early in order to avoid a recurrence of the current economic meltdown the nation is currently experiencing. Tisdale argued, “One of the biggest influences on our behavior is how we saw money handled as we were growing up. We do not teach basic money management in schools and that should be against the law.”

In a lighter moment Marc Morial raised the possibility that the financial meltdown may not be what the President has been describing and compared it to the lack of transparency in the run up to the Iraq War, calling the plan the financial equivalent to weapons of mass destruction. Morial warned that the true extent of the crisis was unknown because the White House has yet to divulge a real analysis of the economy. The former New Orleans mayor expressed his concern that by quickly passing the President’s bailout proposal, the next administration might be saddled with a commitment that is either insufficient to meet the scope of the problem or based upon erroneous data. His remarks were almost prophetic on a day in which skeptical Democratic leaders in Congress went to the White House to meet with President Bush and his advisers to negotiate the bailout proposal.

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