Support Rescue Program for Lender and Tax Foreclosures

by on Foreclosure Help

Advocates for homeowners across the country are reacting with anger to critics of efforts by the Obama administration to help homeowners troubled by lender foreclosures. Critics are accusing Obama and his advisers of using the hard-earned money of responsible citizens to abet the foolishness of borrowers defaulting on their mortgage loans. They assert that losers should be blamed for their losses and should face the consequences. Some say persons who have lost assets to tax foreclosures are not laying the consequences on other taxpayers.

One of these advocates is the Chicago Urban League’s Housing and Foreclosure Prevention unit, led by Margaret Wooten. The league has been campaigning for the use of part of the bailout funds to help homeowners troubled by foreclosures. Wooten says the foreclosure crisis has disproportionately battered African Americans. She claims more than 50 percent of borrowers who have lost their homes to foreclosures are African Americans. In majority of these cases, the homes are occupied, which means the foreclosures are forcing out families into the streets. This is contrast to tax foreclosures, which may or may not be affecting families. In some areas, tax foreclosures involve companies owning relatively large numbers of properties.

Moreover, Wooten has also expressed her disappointment at the reality that most brokers who enticed African Americans to take mortgage loans they can not afford or to use risky mortgages which are sure to fail are their fellow African Americans.

Homeowner advocates are especially angry at groups that support the bailout of large financial institutions, but oppose the rescue of ordinary Americans. Advocates do not accept the argument that bailing out the financial services industry is much more important and more crucial to the nation’s economy than helping out ordinary homeowners. They do not accept comparisons between lender foreclosures and tax foreclosures that put mortgage foreclosures below tax foreclosures on the responsibility scale.

In addition, the financial industry is to blame for the flood of subprime foreclosures that devastated the housing market, leading to more foreclosures and foreclosures even in higher-income neighborhoods. In their efforts to rake in more commissions and fees, banks and mortgage firms provided and serviced loans for applicants without implementing standard screening procedures. Many analysts have been calling on the financial industry to take a big part in solving the crisis that it started. Just like former owners of tax foreclosures, financial executives should correct their mistakes.

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