The Mortgage Crisis in the Black Community
By Congressman Allen West (R-FL) / 3.15.2011
As Members of the United States House of Representatives, we must remain focused on the many tasks required of us to rectify the fiscal irresponsibility emanating from Washington D.C.
One area that I am focused on is the economic downturn of the housing industry. We have a mortgage-foreclosure crisis in this nation, most acutely in the Black community. Nationally, the mortgage crisis has disproportionally crippled the African American Community. According to the Center for Responsible Lending (CRL), 2.5 million homes were foreclosed between 2007 and 2009. Eight percent of all African American homes have been foreclosed, almost twice the rate for white Americans.
An African American family is 76 percent more likely to go through foreclosure than a white family. By 2012, the CRL predicts these closures will drain an estimated $177 billion from African American communities nationwide. The causes associated with the foreclosure crisis are widespread. However, many of the causes came from changes in laws from previous Congresses. The promotion of lax lending standards increased the prevalence of lower and middle-income loans, playing a significant role in the current housing crisis.
Investing in African American communities is exceedingly vital, and more importantly asmart investment. Fifty percent of the purchased Fannie Mae and Freddie Mac mortgages were from lower and middle-income families. The Community Reinvestment Act (CRA) encouraged these loans, and the repeal of the Glass-Steagall Act only served to compound the crisis. As we move forward, increased homeowner responsibility as well as a return of smart bank loaning is vital.
Along with the housing industry, the federal government is facing a budget crisis that must be repaired and handled responsibly. The U.S. Government Accountability Office (GAO) released a 345-page report this past week detailing redundancies and duplicitous programs and agencies throughout the federal government.
Fifteen different agencies oversee food safety laws, more than 20 separate programs assist the homeless, 82 federal programs improve teacher quality, 80 programs help disadvantaged people with transportation, 47 programs help job training and employment, 56 programs help people understand finances, and there are 80 programs for economic development, just as examples. The sum totals of these inefficiencies are between $100-$200 billion.
Two weeks ago, I voted for two major pieces of legislation; one was the two week Continuing Resolution H.J. Res 44 which funded the federal government through March 18th with $4 billion of spending cuts. The second piece of legislation was H.R. 4 which ended the 1099 requirement on our small businesses for purchases at or above $600. This mandate was part of the Patient Protection Affordable Care Act. These two pieces of legislation seek to reduce the impact of federal government taxation and regulatory burdens on the American citizen and entrepreneur, therefore promoting job and economic growth.
However, the American people recognize that we must no longer just take these small calculated measures. The House Republican Leadership has established that it does not seek a “government shutdown”, but rather seeks reasonable and viable solutions for our economic future. We must now push forward to complete the business of the Continuing Resolution for FY 2011 and not get bogged down in the quagmire of repeated stop gap measures.
As I stated to Judy Woodruff on a PBS interview, in light of the revelations of the GAO report, the $61 billion of spending cuts in H.R. 1 are quite miniscule. While the U.S. Senate has rejected H.R. 1, the correct approach should have been for the Senate to INCREASE the spending cuts to include the duplicitous programs identified in the GAO report. Alexander the Great once stated, “Fortune favors the bold.” The American people are looking for principled and bold leadership. I understand “political maneuvering”, but the time has come to engage in the battle for the fiscal responsible future of America. I shall take my position on the frontlines.
A united front is also needed if we plan on progressing as a nation. President George Washington said it best, “We are either a united people or we are not. If the former, let us in all matters of general concern act as a Nation which has national objects to promote, and a national character to support. If we are not let us no longer act a farce by pretending to it.”