Hillary Clinton Campaign Press Release - Hillary Clinton's Plan to Protect American Homeowners

Impact for African American Families and Communities

Today, Senator Clinton announced her plan to protect American homeowners from the growing housing crisis, which threatens to drive our economy into a painful downturn. The housing crisis has a disproportionate impact on African-American families, and threatens to set back the gains in homeownership among African-Americans that we have seen over the past decades.

"Over the past week, we've seen unprecedented action to maintain confidence in our credit markets and head off a crisis for Wall Street Banks. It's now time for equally aggressive action to help families avoid foreclosure and keep communities across this country from spiraling into recession," said Clinton. "The solution I've proposed is a sensible way for everyone – lenders, investors, mortgage companies and borrowers - to share responsibility, keep families in their homes, and stabilize our communities and our economy."

There is a significant impact in the African American community, consider:

• Fifty-two percent of mortgages to African-American families in 2006 were subprime loans, compared with 22 percent for white families. [Center for Responsible Lending, 2007]
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• African-American borrowers were 2.7 times more likely to be issued a high-cost loan and 1.8 times more likely to be issued a high-cost refinance loan than white borrowers. [ACORN, 2007].
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• African-American women are particularly at risk: they received subprime mortgages at the highest rate of any demographic group - despite having slightly higher credit than their male counterparts. [Consumer Federation of America, 2006]
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Senator Clinton has been speaking out for over a year on the need to take action to address our housing crisis, and has been out in front in calling for major reforms: from cracking down on unscrupulous mortgage lenders to establishing a 90-day moratorium on foreclosures and a five-year interest rate freeze on subprime mortgages. After more than a year of downplaying the problems in our housing market and criticizing Senator Clinton's proposals, the Bush Administration now says it is willing to consider more aggressive action. But the time for mere consideration has passed. That's why today Senator Clinton proposed a new plan to protect American homeowners. Her efforts will directly help African American families and communities:

• Senator Clinton's new action to help at-risk homeowners restructure their mortgages will help African-American families stay in their homes. Senator Clinton believes we should extend the Federal Housing Administration's (FHA) capacity to guarantee restructured mortgages as proposed by Rep. Frank and Sen. Dodd, and that the government should stand ready to play a more proactive role in purchasing, restructuring, and reselling underwater mortgages. These steps will help hundreds of thousands of African-American families avoid foreclosure and maintain the value of their homes.
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• Senator Clinton's $30 billion fund for states and localities will help African-American communities fight the foreclosure crisis in their neighborhoods. Senator Clinton understands that communities with high rates of subprime lending and mounting foreclosures are at risk of falling into devastating downward economic spirals. She believes that if we can extend a $30 billion lifeline for a Wall Street bank, we should be able to extend $30 billion to help these communities stem the impact of mounting foreclosures. Subprime lending has been particularly prevalent in majority African-American communities. In New York City, for example, 46 percent of mortgages in the African-American neighborhood of Jamaica, Queens, were subprime, compared to just over 3 percent in mostly-white Bay Ridge, Brooklyn – despite nearly identical median household incomes. As foreclosures mount, Senator Clinton's $30 billion lifeline can be used to buy and rehabilitate foreclosed properties and ward off blight. Senator Clinton is committed to providing these neighborhoods with tools they deserve to weather the storm as the mortgage crisis deepens, including:
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  • Supporting Efforts to End Discriminatory Lending Practices. There is substantial evidence of discriminatory lending practices in the subprime industry. As one lawyer from the NAACP observed "it's almost as if subprime lenders put a circle around neighborhoods of color." Senator Clinton's $30 billion fund will provide support for community-based efforts to investigate and pursue claims against discriminatory lending practices.
  • Encouraging Responsible Borrowing. Senator Clinton's $30 billion housing stimulus will also support homeowner counseling and education programs to make sure families have the information they need to make the right decisions. Fannie Mae and Freddie Mac have estimated that between one-third and one-half of all subprime borrowers could have qualified for prime mortgages.