While President Barack Obama and the Congress remain engaged in a never ending battle over the nation's fiscal matters, Americans continue to struggle with their own share of fiscal fracases. The discussion over whether to lift the nation's debt ceiling or increase taxes on the wealthy, is only a distraction from the greater issue at hand – saving Americans from losing their homes and ending the country's housing crisis.
Millions of Americans have lost their homes over the past decade while many more are currently living in fear of the inevitable. Despite programs that local and federal legislators, along with banking institutions, have implemented in order to assist homeowners stave off a foreclosure, most have proven to be ineffective and predictions suggest a slowdown in foreclosures but not necessarily a decrease in the numbers.
Within the past few months, rays of hope have shined over homeowners who were informed that banks would take a holiday from evicting people whose foreclosures may have occurred during the November and December holiday season. In addition, it was reported recently that 10 banks accused of providing deficient mortgage servicing and foreclosure practices agreed to pay $8.5 billion in cash payments and other assistance to nearly 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010. Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.
It's a good sign, but foreclosures remain at a high and consistent rate. The Center for Responsible Lending (CLR) estimates that 8.1 million homes will have fallen into foreclosure by 2013, but the organization also sees a positive future for homeownership. "Today we have an opportunity to return to a stable lending environment with rising homeownership, providing working families a path to greater economic security and prosperity," according to the CLR.
But we're at a crossroads. Policymakers face major decisions on new lending rules and the government's role in supporting the mortgage market. A key question: How will these policies affect homeownership opportunities for lower- and middle-income families who bore the brunt of the recent crisis?
Neither President Obama, nor policymakers, should act as if the housing crisis has ended. The country's road to recovery will only speed up when the focus is put on improving employment opportunities for lower- and middle-income families and their ability to purchase new homes or stay in their existing homes is secured and protected from predatory and unfair lenders.