'The death of an ... American dream'

On The Crisis Excerpts

April 13, 2009

Here are excerpts from a speech on the nation's foreclosure crisis delivered by James H. Carr, chief operating officer of the National Community Reinvestment Coalition, at an April 3 symposium at the University of Baltimore School of Law, co-sponsored by Baltimore Neighborhoods Inc.

Foreclosure is the death of an important American dream - the dream of homeownership. It's a financial death for many families, often leading them to financial ruin. It's also a death of the prospect of passing significant wealth to children. And, in all too many instances, it can lead to the death of entire communities where foreclosure problems are concentrated. ...

Failure to quell predatory lending in communities of color allowed unfair, deceptive, and reckless practices to become widespread and impact millions of non-Hispanic white households. And this regulatory failure triggered the massive foreclosure crisis that has imploded the housing market, virtually shut down the credit markets, and sent the U.S. economy spiraling into the worst crisis in more than a half century. ...

The impact on communities of color has been and will continue into the foreseeable future to be substantial. In response, a three-fold response is essential. Ending the foreclosure crisis is essential to allowing communities to begin to rebuild themselves. Channeling targeted funding into communities disproportionately targeted for unfair and reckless lending is both appropriate and fair. And passing legislation to ensure that predatory lending is never allowed to occur again is a must. ...

The damage that has been done to communities of color during this crisis cannot be underestimated. It will take years - possibly decades - to recover the wealth lost in many of the financially vulnerable communities as a direct result of predatory lending. As a reflection of this reality, government action should not be limited to ending predatory lending but also should include providing particular and focused attention to helping those communities rebuild. ...

Economic recovery funding should be targeted in a manner that prioritizes communities that exhibit three characteristics: (1) highest levels of unemployment; (2) greatest concentrations of foreclosures; and (3) historically under-funded, inferior or poorly maintained infrastructure. The city of Baltimore would be a primary beneficiary of this type of strategic focus. Channeling dollars to individuals and communities that need them most will immediately stimulate the economy and save and create jobs, because families living on the margins of survival will pour those recovery dollars immediately back into the economy through spending on food, medicine, clothing, child care, energy, transportation and other necessities. ...

Moreover, prioritizing areas hardest hit by the foreclosure crisis would more directly help stabilize the housing markets and steady falling home prices that continue to infect financial institutions. Finally, investing in areas most in need of infrastructure improvements would provide fertile ground for shovel-ready projects in communities long-neglected. ...

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