To Support Latino Wealth, Check Out National Consumer Protection Week Resources!

Happy National Consumer Protection Week!

Every day we interact with the economy as consumers in multiple ways—whether using our debit and credit cards, making payments on mortgages or rent, or using mobile banking services.  Because there are now more opportunities than ever for fraud and financial scams, both online and offline, 78 government and nonprofit organizations have teamed up to offer a wealth of in-depth consumer resources on a wide variety of consumer protection topics.

We’re committed to building and preserving wealth in the Latino community and are proud to support National Consumer Protection Week (NCPW) as a nonprofit partner.  From preventing identity theft and financial fraud to explaining the safe way to buy and sell a home, the NCPW website contains vital information on your personal financial rights as a consumer.

Though we know immigrants greatly contribute to our economy, they are also often the targets of scams.  For this reason, the NCPW website also contains numerous resources intended for immigrants and their families.

On the NCPW website, you’ll find an easy-to-use interface introducing the campaign and featuring new blog posts, highlighted partner organizations, and consumer protection resources.  Click the “Consumer Topics” tab to find a list of categories.

While the site offers more than the topics listed below, here’s a quick look at some of the categories most relevant to Latino consumers:

  • Banking:  Latinos, one of the most underbanked ethnic groups, stand to gain from smart and safe banking practices. Resources include guides to choosing a bank versus a credit union, debit and credit card fraud prevention tips, interest rate explainers, and tips for secure and safe mobile banking.  As Latinos enter the financial mainstream with bank accounts and credit cards, these resources offer a great introduction to help all Hispanics bank safety.
  • Scam Alert:  Without knowing what scams look like, we all become potential targets to scammers.  Unfortunately, scammers often target vulnerable groups, including seniors, immigrants, and those who don’t speak English.  This resource set covers many of the extensive types of financial fraud, including fake financial aid, phony charities, misleading mortgage advertisements, chain letters, and health fraud scams.  Although scammers adapt quickly, the site offers a great starting point for protecting yourself from dangerous illegal financial schemes.
  • International:  This category offers a small set of resources about international scams related to immigration and visa issues.  In these scams, fraudulent lawyers and businesspeople target potential visa applicants and immigrants seeking to get authorization to travel to the U.S.  Many charge high fees while offering no help.  Others claim that U.S. residents won money in foreign lotteries.
  • Your Home:  Over a million Latino families lost their homes during the Great Recession, and millions of Americans are still under water on their mortgages.  This category deals with safe ways to handle mortgage problems and types of home maintenance.  Fraudsters often target desperate homeowners with bogus offers to refinance their homes to prevent foreclosure.  These schemes can involve hefty fees that go straight into the scammers’ pocketbooks and do nothing to help homeowners.  This section is a great resource for homeowners and prospective homebuyers alike.

Too Many Servicers, Too Many Violations: Latino Homeowners Have Had Enough

By Nancy Wilberg Ricks, Senior Policy Communications Strategist, NCLR

Homeowners throughout the nation have seen an uptick in mortgage servicing challenges that range from frustrating to abhorrent.  As banks look to specialized mortgage servicing companies to take over their loans, families are experiencing an increase in the same problems that surfaced during the financial crisis—lost paperwork, mortgage fee inaccuracies, and wrongful foreclosures that at times result from a mere computer glitch.

These mortgage servicers are lightly regulated, little-known firms that act as intermediaries between banks and homeowners.  In 2010, they provided 3% of all mortgage servicing.  After exploding in growth, today they make up a full one-sixth of the market.

While banks find it appealing to unload the burden of managing these loans and their related obligations, evidence suggests that the new firms are worse at keeping track of homeowners’ mortgages than the banks were.

A growing portion of the housing market, Latinos will compose half of all new homebuyers by 2020.  With Latinos already reeling from the Great Recession, which destroyed decades of intergenerational wealth and cost more than one million Hispanic families their homes, this is an ominous turn for the worse.

Latino families are still fighting foreclosure and living with underwater mortgages that they often cannot refinance.  The solution must not be for banks to simply sell off families’ mortgages to specialized servicers that will not prioritize homeowners’ basic legal rights.

Unlike the nation’s largest banks that handle mortgages, the two largest specialized servicing companies, Ocwen Financial Corporation and Nationstar Mortgage, approve fewer mortgage modification requests than even the least generous of banks.  In fact, some go so far as to rescind modifications that banks already approved and processed.  While large banks approved modifications between 29% and 44% of the time, these servicing firms approved only 22–23% of applications.

We take heart in some improvements, however.  Last year, the Consumer Financial Protection Bureau (CFPB) released its provisions for sensible mortgage servicing applied to the entire industry.  This January, it implemented the new rules after working with servicers throughout 2013 to ensure they were ready for the rollout.  Such rules include a ban on “dual tracking,” whereby a lender confusingly engages in loan modification and foreclosure proceedings at the same time.  Under the new rules, servicers must have the capacity to answer questions over the phone and provide information about the homeowner’s foreclosure status.  These seem like the basics of good business, but we know from the crisis that they are anything but part of standard market practice.

Banks that cut corners by selling mortgages to specialized servicing firms have created dangerous circumstances in which homeowners’ basic legal rights are being violated.  For the CFPB, enough is enough.  Just today, Steven Antonakes, Deputy Director of the CFPB, publicly stated that servicers have already had more than a year to improve their practices and align their model with the recently implemented rules.  He further stated that the CFPB would move swiftly to stop violators.  These words are underlined by the CFPB’s initiative to respond to consumers directly through its consumer complaint portal, where families at their wit’s end can seek assistance.

Regardless of who services a mortgage, America’s homeowners deserve observance of the CFPB’s improved protections that are now required by law: decent customer service, an end to dual tracking, and fair consideration for refinancing if a mortgage is unaffordable or under water. Without this, homeowners will continue to bear the burden of an incompetent servicing industry and remain at risk of losing their home, along with decades of accumulated wealth, to a technical glitch.  This is unacceptable, so the CFPB has committed to proving it is changing business as usual in the mortgage finance industry.

How the CFPB Helps Our Families While Washington Chases Its Tail

By Nancy Wilberg Ricks, Senior Policy Communications Strategist, NCLR

Since it opened its doors in 2011, the Consumer Financial Protection Bureau (CFPB) has achieved tangible results while handling nearly 270,000 consumer complaints from everyday Americans.  The CFPB is helping to make companies accountable to their customers and counteract the types of irresponsible corporate behavior that led to the financial crisis.

Created to protect consumers from illegal and unsavory business practices employed by big banks and financial institutions, the CFPB was designed to be an advocate for consumers.  It works to end harmful practices used by mortgage companies, credit card companies, and others.

Through an innovative online complaint portal, consumers who encounter problems with financial products can submit their concerns to the CFPB, which then follows up with the company in question.  This can facilitate the difficult process of dealing with unresponsive or unhelpful customer service departments or worse.

We at the National Council of La Raza (NCLR) asked our supporters throughout the country to share experiences they have had with the CFPB and how the online complaint portal has helped them.  Here’s what some had to say.

Realizing someone had set up bank accounts in his name in another state, David turned to the CFPB for help:

Shortly after CFPB was established, someone unknown to me set up a series of bogus accounts in a credit union in a faraway state.  CFPB offered advice on how to resolve the problem, which was timely and effective.

–David, Springfield, IL

After making an online purchase, Albert in Kansas noticed that he was charged triple the amount he should have paid.  He got in touch with CFPB and was able to get advice on how to deal with the situation.

 Although I didn’t have to file a complaint, I was given some tips on how to interact, keep copies.

–Albert, Topeka, KS

Despite these dramatic improvements made to a financial system that all but entirely ignored consumers’ rights in the past, some opponents in the House of Representatives are vying to weaken the CFPB’s leadership yet again.  This month, the House is considering another vote to fracture the CFPB’s authority.  This is a symbolic and cynical gesture that puts partisan ideology above consumer welfare.

Beyond the CFPB’s proven success with consumers, it has earned approval from industry members, Senate members on both sides of the aisle, the president, and the American public.  Since its inception, the CFPB has proven popular and productive among all types of voters.  It has kept its ambitious calendar of creating new and clarified rules to bring greater transparency and accountability to the market.  And it works very closely with industry and community members to ensure they are following good lending practices.

The CFPB’s voice is crucial for today’s consumers and for a healthy marketplace.  Attempts to excite baseless opposition to a well-functioning and needed institution such as the CFPB is bewildering and tone-deaf.  It shows just how truly disconnected Washington is to Americans’ needs.

For Vulnerable Latino Renters, Mel Watt’s FHFA Must Restore Funding for Rental Housing Programs

At the height of the foreclosure crisis, which claimed the homes of over one million Latino families, Congress authorized the creation of affordable rental housing funding streams via the National Housing Trust Fund (NHTF) and the Capital Magnet Fund (CMF) as part of the Housing and Economic Recovery Act of 2008.

Under Ed DeMarco, Acting Director of the Federal Housing and Finance Agency (FHFA), these crucial rental housing funding sources remained unfunded for more than five years!  However, the FHFA’s newly confirmed director, Mel Watt, has the authority to restore funding to these programs and provide essential affordable housing for the disproportionately vulnerable Latino community.

Since the programs’ creation in 2008, the availability of affordable homes for extremely-low-income households—those struggling at or below 30% of the federal poverty level—has plummeted by more than one million units.  For these most vulnerable families, a massive shortage of nearly five million affordable housing units exists today.

With full funding restored by the FHFA, the National Housing Trust Fund would immediately begin to remedy this shortage.  Nearly 90% of NHTF funding would go directly toward the construction or renovation of rental housing for extremely-low-income households.  Fanning out across the country as block grants to every state and Washington, DC, the funds would bring tangible relief to the Latino community and America’s hardest-hit populations.

Similarly, a fully funded Capital Magnet Fund would award grants to U.S. Department of Treasury–certified community development financial institutions (CDFIs) and nonprofits focused on the development of affordable housing.  These organizations could use the funds to build affordable housing geared toward low-income households.  Unlike the NHTF, funds from the CMF can also be used to stabilize underserved communities through building health care, day care, and workforce development centers.

With an estimated 1.3 million Latinos having lost their homes between 2009 and 2012 due to foreclosure, this reform is desperately needed in the community to prevent homelessness and give every family a chance at basic housing security.

With our families struggling for far too long under the inaction of FHFA, Mr. Watt has a chance to offer real relief to working families of color by reinstating contributions from Fannie Mae and Freddie Mac toward the National Housing Trust Fund and the Capital Magnet Fund.  For the good of America’s economy as a whole, we urge Mr. Watt to make the right choice.

December/January 2014 Latinomics: Mel Watt Confirmed as FHFA Director!

Dear NCLR Supporter:

Thank you for a great December and January!  Hundreds of you contacted your senators in December and Mel Watt was finally confirmed as director of the Federal Housing Finance Agency!

Over the last two months, we’ve also released a new poll on the sequester with Latino Decisions, distributed two Latino employment reports, championed new housing standards issued by the Consumer Financial Protection Bureau (CFPB), and raised the profile of income inequality and low minimum wages.

Read on and see what’s new in Latinomics!

Mel Watt Is Confirmed as FHFA Director

After the Senate took the historic step in eliminating the filibuster for most judicial and executive nominees in December, the path to confirmation was cleared for nominees previously blocked by the threat of filibuster.

Following months of work by homeowner advocates such as NCLR and our partners across the country, the Senate voted to confirm Mel Watt as FHFA Director.

With Director Watt confirmed, we hope this is only the beginning for homeowner relief.Check out our blog here!

Latino Unemployment Falls Under 9% as Minimum Wage Remains Woefully Low:  December and January’s Latino Employment Reports

Latino job growth was relatively strong in November and the Latino unemployment rate dipped below 9% to 8.7% for the first time in five years.  Unfortunately, January saw weaker job growth as the economy added a meager 74,000 jobs in December and more Latinos stopped looking for work. 

Given recent momentum and local victories around the minimum wage, December’s Monthly Latino Employment Report revisits the need to raise the federal minimum wage.  Latinos would benefit disproportionately from an increase in the federal minimum wage because of their overrepresentation in low-wage occupations. 

Want to find out more?  Read the report here!

If you currently don’t receive NCLR’s Monthly Latino Employment Report, sign up today.

New Mortgage Servicing Standards in Effect to Protect Latino Homeowners and Homebuyers

In a win for Hispanic homeowners and homebuyers nationwide, the CFPB rolled out its new Qualified Mortgage (QM) rules and mortgage servicing standards.  Designed to prevent future housing bubbles from occurring and to give the strongest protections possible to consumers while bringing accountability to the mortgage industry, these new rules are the result of years of advocacy by NCLR and allies.

Among several wins, the new rules ban dual-tracking by mortgage servicers—the practice of simultaneously conducting foreclosure proceedings while processing requests for loan modification.

Latinos have long been targets of discriminatory housing practices, and new QM rules will work to protect us from unscrupulous lenders seeking to mislead consumers.

Want to see what the new housing rules mean for Hispanic families?  Read our blog here!

Poll:  61% of Latino Voters More Likely to Vote for Candidates Who Vote to Stop the Cuts

In partnership with Latino Decisions, in December NCLR conducted a poll on Latinos’ attitudes toward the sequester and federal budget.  With an overwhelming majority of 86%, Latinos of all political affiliations were concerned about the automatic sequester cuts. 

While neither Republicans nor Democrats received majority support for their handling of the federal budget, 61% of Latinos said they would be more likely to vote for candidates who vote to stop the cuts and restore government programs.

An overwhelming 96% of Latinos would rather see investments in infrastructure and education to stimulate the economy.  Support for increased investments is strong among both Latino Democrats (99%) and Hispanic Republicans (95%).

Want to hear more about the federal budget poll?  Read about it at NCLR or in The Hill!

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Latinomics is brought to you by NCLR’s Wealth-Building Policy Project and Economic and Employment Policy Project.