More than 150 homeowners, faith and community leaders, and housing advocates from 26 states laid out recommendations for fixing the housing crisis and getting our economy back on solid ground.
After returning from the meeting, Rev. Paul Slack, Pastor of New Creation Church in Minneapolis and President of ISAIAH, commented, "We need help. My home, our community and our economic future are depending on it. I was pleased to share solutions with White House officials that will address the housing crisis, restore our economies, and rebuild our economy. I look forward to hearing bold solutions from this Administration soon. We need action and we need it as soon as possible."
Local leaders from Minnesota told the White House it is far past time that they enact policy solutions such as:
• Principal reduction – the bold plan we need to fix the housing crisis, create jobs, and reset the economy.
• Publicly support the RMBS Task Force investigating big bank fraud and make sure there are enough resources and staff supplied to the investigation that will result in principal reduction for underwater homeowners around the country and accountability for Wall Street crimes that crashed our economy.
In Minnesota there were 21,000 foreclosure last year, with over half concentrated in the metro area. An estimated 18% of Minnesota homeowners are underwater. If mortgages were reduced to the current value, there would be an average savings of $365 per month to the homeowner, and $402 million put back into the local economy each year according to the report Wasted Wealth: Why Banks Should Fix Mortgages Instead of Foreclosing on Homes, published by several community groups, including ISAIAH this year.
The crisis in Minnesota is rooted in illegal activity by lenders and Wall Street and inadequate rules and enforcement. The misconduct included predatory sub-prime lending, targeting of senior citizens, veterans, and communities of color, and bundling and pawning off flawed mortgages, avoiding accountability. Those forces combined with record long-term unemployment to bring our economy to the brink of collapse and continue to jeopardize our economic recovery.
Nationally, there are almost 16 million underwater homes, worth $2.8 trillion, that are $1.2 trillion underwater. Resetting those mortgages to fair market value would save the average underwater homeowner $543 per month, pumping $104 billion into the national economy every year. This would create 1.5 million jobs nationally.
Yet for too long Washington has been silent on these issues. That is why groups have joined together in the Home is Where the Vote Is campaign to demand President Obama and Governor Romney address these issues immediately on the campaign trail.