The NonProfit Times - February 1, 2008 - (Page 14) OPINION Continued from page 12 tion and regulation to control subprime and predatory lending abuses. • Ideology: Part of the hidden back story is that some portion of these homeowners shouldn’t have been. We’ve jimmied with interest rates, closing costs, documentation requirements, and eligibility to make some families into homeowners -- because of an ideology that homeownership is good and renting is automatically bad -- when they didn’t have the financial or familial where- withal to be homeowners. As a result, even with multiplying epicenters of foreclosures, some municipalities apparently prefer evictions and illusory property resales, rather than maintaining people in their homes as renters or lease-purchase occupants or working with nonprofit partners to experiment with alternative forms of homeownership such as community land trusts or limited equity cooperatives. Nonprofits are going to have to take the lead to undo this ideological bias and find ways of keeping people in their Nonprofits are going to have to take the lead to undo this ideological bias. homes and protecting neighborhoods from the instability of skyrocketing rates of vacancies and abandonment. • Counseling: For subprime homeowners in the “winners” category and for future home purchasers eager to avoid the same plight, pre-purchase and post-purchase homeownership counseling will be needed. When the White House announced the Hope Now coalition’s toll-free phone number for counseling, there were 45,000 calls in the first three days alone -- despite the fact that President Bush actually announced the wrong telephone number.But the six national nonprofits designated by the Hope Now Alliance to field those calls had only 180 trained counselors available, a number they had hoped to increase to 250 by the end of the year.(An update of the numbers trained was not available at deadline.) The staff and resource challenge for the entire field is obvious. • Corporate Responsibility: The Hope Now plan gives all of the bankers and servicers in the coalition a kind of carte blanche, as if they’re blameless in this, or perhaps that they’re even sort of heroic in temporarily freezing rates for a million or so homeowners. Truth be told, some of the subprime mess is related to predatory lending practices, and much of it to mortgage brokers who induced homebuyers to take loans that they shouldn’t have taken. The mortgage process is daunting and confusing to most people, especially when faced with fast-talking brokers whose overriding interest is in closing the deal. Nonprofit watchdogs will have to do more than sign partnership deals with lenders such as Countrywide (the biggest subprime lender recently bailed out by Bank of America); they will have to lead the way in sorting out which corporations and which corporate practices should be held responsible and accountable. • Funders: There is no surplus of foundation funding for civil rights, for fair housing, for affordable housing, for community development.The proportions of foundation grant dollars going to these purposes are in the single digits and in recent years have been on the decline. Nonprofits providing services and support to families who have lost their homes, trying to acquire and maintain foreclosed properties so that neighborhoods don’t go downhill, and offering counseling to help homeowners refinance their mortgages, will be hard pressed if relying on existing resources. Since foundations have been such vigorous promoters of low-income homeownership, they should redouble their efforts to nonprofits that will be in the front lines of making sure these homeowners -- and the neighborhoods they live in -- don’t suffer the brunt of the nation’s unregulated free-for-all with subprime mortgages. NPT Rick Cohen is the former executive director of the National Committee on Responsive Philanthropy in Washington, D.C., and edits the Cohen Report online. His email is rcohen51@verizon.net 14 FEBRUARY 1, 2008 THE NONPROFIT TIMES www.nptimes.com http://www.harvardee.org/performance http://www.harvardee.org/performance http://www.nptimes.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.