First the bank took my job...

By Fr. Frank Cloherty
priest, member PICO National Network

More than eight million people have lost their jobs since the recession began. Over 1.8 million people have been forced out of their homes. Currently, one in seven U.S. homeowners is in foreclosure or default.

Now, the banks that are most responsible for causing the economic crisis are launching a massive second wave of foreclosures aimed at unemployed homeowners. Economists estimate that over the next two years there could be as many as five million more foreclosures - a huge dead weight on the housing market and the economy. With billions of dollars from the federal government, banks are back making big profits, paying out big bonuses, but they are still foreclosing on families at a record pace.

Besides not keeping up with the relentless pace of foreclosures, the Obama Administration's Making Home Affordable Program does not extend help to unemployed homeowners, who are now becoming the primary driver of the foreclosure crisis.

The cruel irony is that the same banks that destroyed millions of American jobs are now forcing people - who've paid their mortgages on time for years - out of their homes because they've lost their jobs.

It doesn't have to be this way.

Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Maxine Waters (D-Calif.) have offered an amendment to the House financial reform legislation that would put $3 billion from the Troubled Assets Relief Program (TARP) toward helping unemployed Americans pay their mortgages. We strongly support this amendment, and applaud Chairman Frank and Rep. Waters for taking the lead on this important issue. But we also know that unemployed homeowners do not have to wait for legislation to be able to receive help to stay in their homes. Under the Troubled Asset Relief Program (TARP), Treasury could extend immediate assistance to unemployed homeowners.

Last month, at a 600-person town hall meeting in Brockton, Mass. with Chairman Frank, the Brockton Interfaith Community, a coalition of over 20 congregations and member of the PICO National Network, urged Rep. Frank to press Treasury to offer an immediate lifeline to unemployed homeowners. The U.S. Treasury could follow the lead of Pennsylvania which, for 25 years, has operated a successful program - the Homeowners Emergency Mortgage Assistance Program (HEMAP) - that helps families to weather difficult economic times without losing their homes. Such an approach would not only give families some help in coping with a recession that has brought unemployment rates at levels and duration not seen in decades, while also stabilizing the housing market.

Since this town hall meeting, Chairman Frank has publicly called on Treasury on numerous occasions to act immediately. The proposals on the table would be important steps forward in the fight to stop preventable foreclosures and keep people in their homes. They are targeted at homeowners who've paid their mortgages on time, but now face a recession, largely caused by banks, that is deeper and longer lasting than anything they have seen in their lifetimes. They also has the advantage of not relying on voluntary action by banks, who have continued to drag their feet on loan modification.

With unemployment fast becoming the primary driver of the foreclosure crisis, and the employment situation looking bleak into 2011, the federal government must act immediately and aggressively to keep millions of struggling families in their homes.

Fr. Frank Cloherty is pastor at Our Lady of Lourdes Catholic Church in Brockton, Mass., and a member of Brockton Interfaith Community and PICO National Network.

By Frank Cloherty |  December 14, 2009; 10:47 AM ET Save & Share:                 
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