By Lucy Drafton

Home foreclosures are increasing in the District of Columbia. There were 366 home foreclosures in the District, as of May 2008, according to the Recorder of Deeds. There were only 281 home foreclosures for all of 2007. The increase in the number of foreclosures nationally was caused by deceptive mortgage lending practices, inadequate underwriting, inappropriate loan products, a subprime market, abusive prepayment penalties, and excessive broker fees, according to the National Community Reinvestment Coalition (NCRC), which held its 2008 national conference in March.

While many people are aware of the problem of foreclosures, many are still seeking answers on what causes it; and even more important, how to solve it. At the NCRC’s conference, Creating the Vision for a Fair Economy: Investing in People and Communities, it was put forth that home foreclosure increased because of the regional economic downturns, speculation on skyrocketing home prices and rampant unfair and deceptive mortgage lending practices. NCRC, a nonprofit association of more than 600 community-based organizations that promote access to basic banking services, to create and sustain affordable housing, job development, and vibrant communities for America’s working families, held a full-day session on “Foreclosing on the American Dream: Recreating Sustainable Homeownership,” which discussed the foreclosure issue—from causes to probable remedies.

During the workshop, a panel of nonprofits, community leaders, banks, lenders, and academia looked back at the crisis, and tried to offer a better understanding of the types of intervention that would be needed to solve the current foreclosure problems going forward. 

Legislative solutions were discussed including the proposed Anti-Predatory Lending Bill that recently passed the House of Representatives and is now pending in the Senate. Another remedy is a bill that was introduced by Congresswoman Maxine Waters of California, requiring servicers to provide loss mitigation to borrowers. Another proposal, discussed by Jim Carr of NCRC, is the homeowners emergency loan program proposal. After much discussion and debate at the session, there still were no easy answers proposed to this nationwide problem.

Lucy Drafton is a public affairs specialist in DISB’s Office of Communication and Public Affairs.