Focus on Mortgage Crisis in City Council

By Maurice Pinzon
This past Saturday, the Reverend Jesse Jackson led a hearing sponsored by the New York City Council to focus attention on the sub-prime mortgage crisis. The Reverend Jackson indicated the problematic loans were concentrated in specific New York City neighborhoods and challenged the audience in the Council Chambers not to renegotiate with lenders individually, but rather to participate in “mass negotiations” of sub-prime loans.

The Reverend Jackson accused sub-prime lenders as disproportionately targeting poor Latino and African-American borrowers. He said, “There are now efforts to bailout, or to liquefy the bankers and not to bailout in the nation the affected victims.” Those “victims” he indicated, were living in what he called, “sub-prime predator zones,” where “the poorest people pay the most for the least.”

The Reverend Jackson said in states like Michigan, the foreclosure rates were “20 percent white, 40 percent Latino, 55 percent black.” He indicated that “those numbers hold up when you look at Queens” and other Latino and African-American neighborhoods in New York City.

Also at the hearing was Michigan Congressman John Conyers Jr., who told the audience in the packed Council Chambers that as representative of the House Judiciary Committee, it was within his committee’s jurisdiction to rewrite the bankruptcy code. “We are working on a master plan,” he said.

The proposed legislation, Congressman Conyers said, would “allow those who get caught up in a foreclosure situation the immediate ability to rewrite their mortgage at the reduced actual value of the property, rather than the usual inflated value in which it was sold,” with the goal of getting a fixed rate.

Congressman Conyers pointed out that a crisis he called the most serious since the Savings and Loans scandal also required the participation of the U.S. Attorney General. He said, “Those who have violated the law should be prosecuted,” for predatory or discriminatory lending practices.

Congresswoman Sheila Jackson Lee, from Texas, agreed. She said the wide sub-prime crisis was “about blatantly looking in the face of those who have perpetrated a crime against people who simply wanted to have a house and to buy into the American Dream.”

And she pointed out it was not just lenders who were to blame but also Wall Street’s financial institutions that had built a financial infrastructure around sub-prime loans, thereby turning them into investments opportunities.

The hearing was chaired by Councilman Leroy Comrie, whose constituents have been disproportionately impacted by the mortgage crisis. Other council members at the hearing were Lewis Fidler, Gale Brewer, Letitia James, Robert Jackson, James Sanders, Jr. and Al Vann.

Council member Fidler characterized the lending institutions as “an industry that had run amok.”

Voters must absolutely insist, said Council member Fidler, that “as the campaign for president of the United States continues, that the candidates for both parties lay their plan, lay out their agenda, tell us what they are going to do about this, perhaps the most significant crisis that is affecting the people of this country domestically for many, many years.”

Although ostensibly a “Community Forum Addressing Foreclosure Crisis,” the event became a vehicle for the Reverend Jackson and elected officials to convey a sense that they were angry or moving on an issue that is spreading economic fear and dislocation throughout the nation.

The participants wanted to point out that New York City was not immune to the mortgage crisis.

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