Urgent Action Needed to Stem Foreclosures, Greenlining Institute Warns

For Immediate Release

Greenlining Institute
Contact: 

Bruce Mirken, Media Relations Coordinator, 415-846-7758

Urgent Action Needed to Stem Foreclosures, Greenlining Institute Warns

WASHINGTON - The
Greenlining Institute, whose 2005 warnings of a growing crisis in
subprime lending were ignored by then-Fed Chair Alan Greenspan and other
regulators, sounded a new alarm today as the Senate Banking Committee
prepares to examine the ongoing foreclosure crisis. Greenlining urged
aggressive action to stem a pending tide of foreclosures, including a
moratorium and principal reductions.

“As the film ‘Inside Job’
so strikingly documented, we warned of the subprime crisis years before
officials started paying attention, but were ignored,” said Greenlining
Institute Executive Director Orson Aguilar. “Now we have a new warning:
The foreclosures that have devastated neighborhoods so far will be
dwarfed by the new tide of foreclosures that’s coming, and the result
will be unbelievable misery. We urgently need a national foreclosure
moratorium while we put in place a program of across-the-board principal
reductions that will keep people in their homes.”

Statistics
assembled by the Greenlining Institute indicate that seven percent of
white homeowners have been foreclosed upon or are in imminent danger of
foreclosure, while the comparable figures for African Americans and
Latinos are 11 percent and 17 percent, respectively. Foreclosures are
expected to drain $273 billion from Latino and African American
communities nationally.

“Millions
of hard-working Americans risk losing their homes due to shady lending
practices and an economic downturn that they did not create,” Aguilar
said. “We completely agree with Federal Reserve Governor Daniel Tarullo,
who said last Friday
that foreclosures simply cannot be better than modifications, including
principal reductions – but to be effective, action must happen now.”

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