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National People’s Action, Senator Durbin Release Devastating Chicago Foreclosure Report

Submitted by on March 16, 2010 – 9:41 am

National People’s Action released the 2009 Chicago Foreclosure report with Senator Durbin yesterday. The report, written by NPA Research Analyst Nick Bianchi, shows that 2009 was the worst year ever for foreclosures in Chicago, with the crisis deepening in middle class communities. The report speaks to the need for a fully empowered CFPA and for a Congress that puts People before Big Banks.

Click here for the report, here for the latest Huffington Post blog from NPA Director George Goehl, and here for video from the press conference.  See below for the press release.

National People’s Action, Senator Durbin Release Devastating Chicago Foreclosure Report
Report Reveals a Foreclosure in Chicago Foreclosure Every 22 Minutes

March 15, 2010, Chicago – 18 months after reckless and predatory lending took down the U.S. economy, foreclosures are occurring at a record pace and Washington has yet to enact any meaningful reform of the financial industry.

While the minority and low-income neighborhoods that were the main targets of predatory lending continue to bear the brunt of foreclosure, the devastation is spreading.   The sub-prime crisis has meant high unemployment and slashed City and State budgets, which in turn has led to foreclosure spikes in virtually every neighborhood in the City of Chicago.   Over half of the land in Chicago is within 1/10th of a mile of a foreclosed property.  In addition, the average Chicago homeowner has lost $27,000 in their home’s value in the last 5 years.   Citywide that adds up to approximately $15 Billion in wealth down the drain.

‘The picture we get is that foreclosures only happen in low income and working class communities,’ said Curtis Smith, a community leader from the Lakeview Action Coalition.   ‘We know that the foreclosure crisis is a wave that is afflicting communities of all stripes.  In my community, Lincoln Park, the rate of foreclosures increased 105% in the last year, which is the largest increase in Chicago.  It has taken longer to reach us, but the foreclosure crisis is here.’

The escalating rise in foreclosures in Chicago last year shows that the financial crisis is far from over.  Risky and reckless subprime loans that caused the foreclosure crisis are still legal – Banks and mortgage brokers can still sell  option ARMs, interest only, and no doc loans.  The U.S. Senate is considering following the House to create a Consumer Financial Protection Agency that would stop the spread of risky and reckless financial products, but it faces stiff opposition from the banking industry.

“Predatory and subprime lending created an unprecedented foreclosure crisis that sent our economy into a tailspin, resulting in millions of people losing their jobs, and spurring even more foreclosures.  To keep this from happening again, we need a strong, independent consumer protection agency that will protect all of us from predatory and unsafe financial products,” said George Goehl, Executive Director of National People’s Action.

National People’s Action is a national organizing, policy, research, and training center for grassroots community organizations dedicated to building power to reclaim our democracy and advance racial and economic justice. For more than 36 years, NPA has worked to build and strengthen people’s organizations, develop indigenous leadership, and advance campaigns for a more just, equitable, and sustainable society.