DENVER, Aug. 27 /PRNewswire-USNewswire/ -- Henry Cisneros, former
secretary of the US Department of Housing and Urban Development (HUD),
declared today that the housing industry is in a "truly dangerous place" and
that significant steps must be taken by the next administration to address the
mounting problems.
Mr. Cisneros spoke at a housing forum at the Democratic National
Convention that was hosted by the Federal Home Loan Bank of San Francisco
(FHLBank San Francisco). Mr. Cisneros said the stakes are high because
housing "is so embedded in the overall economy," and the situation "continues
to get worse."
"Today, we cannot say how it will turn out," Mr. Cisneros told the
gathering at the Colorado Convention Center. Joining him on the panel were
Marc H. Morial, president and CEO of the National Urban League, and Maurice
Jourdain-Earl, managing director of Compliance Technologies. The panelists
reflected their personal views during the forum, and those views were not
necessarily endorsed by the FHLBank San Francisco.
Dwight Alexander, vice president of legislative affairs at FHLBank San
Francisco, set the stage for the discussion by noting that the housing
industry has been beset with foreclosures related to sub-prime loans,
depreciation of property values, tight credit by the banks and problems at the
mortgage giants, Fannie Mae and Freddie Mac, which are suffering millions of
dollars in losses each quarter.
"The housing industry is facing serious problems, and we brought this
talented panel together to help us better understand the issues and what the
solutions might be," Mr. Alexander said.
With the economy staggering along, Mr. Cisneros said the new
administration next year will be forced to pass a second stimulus package. He
said it must contain measures to deal with the credit crunch that is
curtailing investments and lending. "We won't get the job machine started
without credit," he said, adding that measures must also assist people and
communities hurt by foreclosures, assist those who will be hurt in the future
and increase the supply of affordable rental housing.
Mr. Morial agreed, but said an emphasis must be placed on homeownership.
He noted that government programs, such as the GI Bill, were the foundation
for the growth of the middle-class in the 70s, 80s and 90s. "Homeownership
must be a goal," he said. "The goal for the nation must be to close the
homeownership gap between whites and people of color."
Mr. Morial also said that any measures aimed at improving the credit
situation for banks must also include a national law against predatory lending.
Meanwhile, Mr. Jourdain-Earl gave the audience a clearer picture of sub-
prime borrowers. His company is a leading provider of technology that analyzes
lending patterns across the country. His data determined that while the
majority of sub-prime loans went to non-Hispanic whites, there was a much
higher concentration of sub-prime loans to people of color.
"Whites had more sub-prime loans than all minorities combined," he said,
but added that more than 50 percent of the loans to African Americans were
sub-prime loans.
The Federal Home Loan Bank of San Francisco
The Federal Home Loan Bank of San Francisco delivers low-cost funding and
other services that help member financial institutions make home mortgages to
people of all income levels and provide credit that supports neighborhoods and
communities. The Bank also funds community investment programs that help
members create affordable housing and promote community economic development.
The Bank's members -- its shareholders and customers -- are commercial banks,
credit unions, savings institutions, thrift and loans, and insurance companies
headquartered in Arizona, California, and Nevada.
.gif)
