WP: Mortgage Crisis Threatens to Reverse Urban Revitalization Successes

[JPZenger]

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/21/AR2008072102490.html

"Eighteen months ago, Reservoir Hill was a prime example of the progress that cities across the country have made reclaiming blighted neighborhoods as a nationwide housing boom helped lure homeowners and chase away crime. Now the mortgage crisis threatens to reverse those gains as foreclosures multiply, house prices plunge and vacancies rise. ... Democratic leaders are demanding $4 billion in emergency aid to stabilize hard-hit communities by purchasing vacant and foreclosed properties.

... White House as recently as yesterday threatened to veto the bill unless the money is removed... "I can't imagine how in one breath they could ask me for unlimited authority to give unlimited credit to Fannie and Freddie . . . and turn around and complain to me that we can't provide relief in this situation," said Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.). "I find it somewhat hypocritical, and most people will as well."

The administration's opposition has infuriated a coalition of Democratic governors, big-city mayors and community activists, who say the money is their best hope for stabilizing communities where the battle against blight had so recently been won. "They don't understand the market dynamics here at all," said Paul Graziano, Baltimore housing commissioner. "We can let the market adjust and see the last seven or eight years of investment go down the tubes. Or we can intervene now to reclaim this inventory and protect these neighborhoods."

The damaging effects of even a single foreclosure on a community are well-documented. Prices of surrounding homes fall, and houses become tougher to sell. The Center for Responsible Lending projects that nearly 45 million properties not facing foreclosure will decline in value by a total of $233 billion by the end of next year."

[flashl]

1. Neighborhood activist groups raised the alarm about predatory lending in the 90s

Did it change our public policy makers' minds?

This is NOT new. Today, a widely known predatory lender is Countrywide, a few years ago, it was Fleet Bank.

Since the 90s, organizations like ACORN and NACA, State AGs, Mayors, etc., across the country, worked tirelessly to produce years of statistics by state and were panelist at Congressional hearings to challenge public policy decisions that portray the 'banks' as the victims.

The targets are/were "property rich but cash poor" Urban areas.

The June 28, 1990 warning, The Six Trillion Dollar Debt Iceberg (PDF); A Review of the Government's Risk Exposure, demonstrates that the economic fallout and bailout numbers are suspect.