Seattle Coalition To Stop Foreclosure

Housing is a human right. The foreclosure crisis is a threat to our families, our neighborhoods, and the future of our communities.

The disproportionate rate of foreclosures in communities of color and low-income communities is an unjust result of the discriminatory and predatory practices of the big banks.

We believe that the city should pursue any and all solutions to the housing crisis including those that help to reset mortgages to fair market value and provide homeowners with equitable and sustainable loans.

We join with individuals, faith communities, community organizations, and businesses to support renters and homeowners to help create a stronger Seattle in which all families thrive.

Endorsed by SAFE—

The Impact of the Foreclosure Crisis

The economic crisis caused by the big Wall Street banks has devastated our communities. Across the country nine million families have lost their homes to foreclosure; nine million Americans have lost their jobs; and 16 million families owe more on their mortgages than their homes are worth. The foreclosure crisis is a threat to our families, our neighborhoods, and the future of our communities. It must be addressed.

Foreclosure Crisis for Seattle

  • 37.8% of homeowners in Seattle are underwater 10.3% of underwater homeowners are delinquent on their mortgages[1].
  • The average amount of negative equity for homeowners is -$92,276.
  • More than 9,000 families have lost their homes in Seattle.

Foreclosure Crisis for Communities of Color

  • The foreclosure crisis will wipe out 15 years of gains in homeownership for people of color.
  • Due to racially discriminatory lending practices by the big banks, African American and Latino Americans are 30% more likely to have subprime mortgages[2].
  • The Seattle Public Schools have identified 1,900 students as homeless. 47% of those students are African American.

Solutions

The big banks have been sued countless times for fraudulent and racially discriminatory mortgage lending practices. They have settled or lost many of these lawsuits due to the overwhelming evidence of wrongdoing. Additionally, the banks received $789 billion in bailouts while paying $140 billion in bonuses and foreclosing on millions of homes.  Still, too few homeowners are getting the help that they need, and the crisis in our communities continues.

We need long-term solutions to the housing crisis. Banks are not offering equitable refinancing or modifications to most homeowners in need, nor are they reducing principal on home loans – two critical steps in stabilizing the housing market and helping families who were targeted with subprime loans. The city should pursue policies to reset underwater mortgages to fair market value with equitable and sustainable loans, including exploring the use of eminent domain to force principle reduction on mortgages from banks unwilling to negotiate with hardworking families. These solutions, among others, offer a pathway to prosperity for people of color and low and middle income families in Seattle.


[1] Zillow, 2012 Q2 Report, http://ww1.prweb.com/prfiles/2012/08/23/9833333/Zillow-Neg-Equity-Report-Q2-UPDATED.pdf

[2]EPI, 2008 Subprime mortgages nearly double for Hispanics and African Americans http://www.epi.org/publication/webfeatures_snapshots_20080611/