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Senate Ignores Help for Homeowners, Bankruptcy Change the Most Effective Solution

Wednesday, April 2, 2008

In response to bankruptcy measures that would help more than half a million families being dropped for the Senate housing package, the following 15 civil rights, consumer and housing groups – Center for Responsible Lending, Leadership Conference on Civil Rights, ACORN, American Federation of Labor and Congress of Industrial Organizations, Consumer Action, Consumer Federation of America, Consumers Union, Lawyers' Committee for Civil Rights Under Law, NAACP Legal Defense & Educational Fund, Inc., National Association of Consumer Advocates (NACA), National Association of Consumer Bankruptcy Attorneys, National Association of Neighborhoods, National Community Reinvestment Coalition, National Council of La Raza, National Fair Housing Alliance – issued a joint statement:

"At a time when Congress and the Administration urgently need to take significant action to combat record-high foreclosures and home depreciation, the Senate today chose to ignore the most effective solution. Lawmakers decided to exclude a provision that would allow courts to modify unaffordable mortgages, a provision that without any cost to taxpayers would help stabilize communities and prevent up to 600,000 additional families facing foreclosure. This missed opportunity is regrettable. Keeping it out of proposed legislation was a win for the financial services industry that brought us this mess and, in so doing, the country to the brink of recession. This is a loss not only for ordinary homeowners, but for us all, since today's Senate bill would allow massive and preventable foreclosures to continue weakening the entire economy.

Sadly, as long as policymakers rely on inadequate voluntary measures, we will continue to see foreclosures tear down communities and wipe out the most important source of financial security that most Americans have. Twenty thousand homeowners with subprime loans are losing their homes every week. It is not too late to do the right thing. We urge both the Senate and the House to take fast action to lift the ban that now holds homeowners hostage to voluntary relief from their loan servicers and investors that may never come."

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For more information: Kathleen Day at(202) 349-1871 or kathleen.day@responsiblelending.org; Sharon Reuss at (919) 313-8527 or sharon.reuss@responsiblelending.org; or Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org.