Federal Reserve Officials Hear Victims of Housing Crisis

By Dave Scharfenberger, Herald Contributor

Mary Bridges came to the hearing with Federal Reserve Officials looking for answers.She is facing foreclosure and is asking for a plan to help her keep her home, where she has lived for 19 years.

“I think that my mortgage servicer can do better,” said Mary, a resident from Kennedy Heights.”I like my home and my neighborhood.There has to some hope out there.”

Mary was one of many who packed the meeting with Fed officials to tell their stories of the horrors of lending practices and the effects of foreclosures.

Maria Mercado who lives in Green Township said she is tired of”getting the big run around.””I can’t get a loan modification.I get passed from one person to another.I send my papers and then they say that they didn’t receive them.”

Others complained about the number of foreclosed, vacant properties in their neighborhood.

“The house next door to me is vacant – behind me is a vacant house.Two doors up from me is vacant, the corner house is vacant and the house around the corner is vacant, said Pat Hendricks, a leader in North College Hill.”These vacant properties are in a constant state of deterioration and I feel like no one cares how my neighborhood is affected.”

The meeting with Fed officials is one of 10 meetings that Chairman Ben Bernanke agreed to hold around the country.The meetings were arranged at a meeting with representatives from Working In Neighborhoods, Communities United For Action and National Peoples’ Action held last April with Bernanke and three other members of the Board of Governors of the Federal Reserve.Joseph Firschein, Assistant Director and Community Affairs Officer and Anna Alverez Boyd, Associate Director of Analysis and Communications were present to hear from people who are hurt by the foreclosure crisis.

Several other public officials attended including State Representative Denise Driehaus, Hamilton County Commissioner David Pepper, and City Councilmembers Roxanne Qualls and Cecil Thomas.Also in attendance were representatives from U.S. Bank, Fifth Third Bank, PNC Bank, and Spirit of American and aides from SenatorGeorge Voinovich and Congressman Steve Driehaus.

Some of the issues that community leaders raised to the Federal Reserve Officials were:

  • A Mortgage loan product that is a 30 year fixed loan without prepayment penalties, yield spread premium and high closing costs.
  • Modernize the Community Reinvestment Act and the Home Mortgage Disclosure Act to include all mortgage institutions.The Federal Reserve should institute a meaningful grading system with teeth, and a race-based lending test.CRA should also insure community people are involved in the scoring system.
  • Make mandatory affordable modifications.If they cannot modify the loan, they must prove why they cannot.Also a moratorium on foreclosure process while the mortgage company or servicer is determining the loan modification.
  • Maintain vacant properties, providing a contact for communities to present complaints about maintenance; and give incentives to encourage lenders to give or sell at at reduced price Real Estate Owned Properties to Neighborhood Development Corporations.
  • Make Banking fees reasonable and encourage a bank to provide a small loan product as an alternative to predatory lending.

“When you’re talking to us, you’re really talking to them,” said Anna Alverez Boyd.If Federal Reserve officials wanted stories, they heard plenty.”Your stories really put a face on what this crisis is about, said Boyd.She and Joseph Firschein promised to take the stories and issues raised by WIN and CUFA back to the Board of Governors.

WIN and CUFA representatives along with National Peoples’ Action plan to meet with Chairman Bernanke at the conclusion of the ten hearings to discuss the results of the hearings and possible actions to address issues raised at these meetings.

Roger Davis, President of Communities United For Action, is looking for results.”They saw and heard what is going on because of foreclosures and how people are hurting,” said Davis.”Now we will see what the Federal Reserve will do.”