Katie contributes to Woodstock’s policy development, outreach, coalition building, and communications efforts. Katie also contributes to Woodstock's research and analysis, including reports on the effect of demographics and institutional characteristics on student debt, disparate impacts of negative equity on Chicago area communities and racial disparities in FHA/VA lending. Interests include student debt reform, impacts of and solutions to the foreclosure crisis, homeownership preservation, community reinvestment, consumer finance, financial reform, and financial security over the life cycle. Her projects include crafting informative and engaging communications strategies for economic security issues, assisting the convening of the Regional Home Ownership Preservation Initiative, and developing ways to make Woodstock's data and research more accessible and interactive.
“I combine data-driven policy analysis and effective communication strategies to advocate for better policy solutions to issues facing low-wealth communities and communities of color,” says Katie.
Prior to joining the Woodstock Institute, Katie gained experience in research and communications as a reporter and intern at Chicago Public Radio and the Chicago Reader.
Katie received her Master of Public Policy from the University of Chicago and received her B.A. with honors in Public Policy Studies and Latin American Studies from the University of Chicago.
Recent posts by Katie Buitrago
As you may know, Capital One recently applied to regulators to acquire ING Direct. The deal would create the fifth-largest bank in the country and raises substantial concerns about how the deal would impact communities.
Next week will be an important one for every Chicago area consumer who uses financial services, from the payday loan store on the corner to Wall Street’s biggest banks. The Senate Banking Committee will hold a hearing September 6th to consider the confirmation of Richard Cordray, President Obama’s nominee as Director of the Consumer Financial Protection Bureau (CFPB). It is crucial that the Senate quickly confirm Cordray, a former Attorney General of Ohio who is well-qualified in consumer issues. However, forty-four Senators, including Illinois Senator Mark Kirk, have vowed to block any nominee until the CFPB is significantly weakened. The longer the process drags on, the longer the CFPB will lack the authority to regulate some financial service providers which have high potential for abuse—such as payday lenders, independent mortgage lenders that made the majority of predatory subprime loans during the housing bubble, and debt settlement companies.
One of the exciting aspects of the Consumer Financial Protection Bureau (CFPB), which opened its doors on July 21, is that we finally have a federal regulator for non-bank financial institutions, like independent mortgage lenders and payday lenders. But the CFPB will not have the authority the regulate other non-bank financial institutions, like consumer finance companies, debt settlement companies or prepaid card providers unless it finds that they are larger participants in the market. It’s heartening to see that one of the CFPB’s first orders of business is to define the scope of non-bank financial institutions it will regulate so it can get to work protecting consumers regardless of where they conduct their financial business.
This week, our staff takes an interest in data on Cook County expenditures and federal housing programs, how man and dog became intertwined, and the prospect of pumping oil through one of North America’s largest rainforests.
It’s well established that when a homeowner owes more on their home than it’s worth, they’re more likely to go into foreclosure. For the most part, government foreclosure prevention programs are not designed to help these underwater homeowners—instead, they focus on issues of affordability. Lowering monthly payments would help homeowners who go into foreclosure because they can’t afford their mortgage, but it wouldn’t necessarily change the incentive to pay for a deeply underwater homeowner. One program that does address underwater loans is the Principal Reduction Alternative (PRA) portion of the Making Home Affordable initiative, introduced in February of last year. Treasury recently released data on the progress of PRA as part of its monthly HAMP reports.
The Chicago City Council unanimously passed an ordinance recently that would hold mortgage servicers accountable for maintaining the thousands of vacant homes stuck in the foreclosure process without resolution. We estimate that these abandoned vacant homes can cost Chicago up to $36 million annually.
“American payroll and household formation numbers are actually on the rise. Traditionally, this would mean that these households, with increasing capital, would naturally look to invest in a home, but getting the loan to do so is on a downward trajectory.
Legislation that would regulate rent-to-own stores has popped up in Illinois and in D.C., but neither bill has strong enough protections for consumers of this extremely high-cost service. The national legislation is particularly harmful—it would prohibit stores from disclosing the interest rate on rent-to-own transactions and preempt stronger state laws. On the eve of the launch of the Consumer Financial Protection Bureau, these industry-backed bills remind us why we badly need a strong consumer watchdog with the authority to regulate financial transactions that occur outside of traditional banks.
We’ve been pushing for stronger protections on overdraft protection loans for years, and the Office of the Comptroller of the Currency (OCC), a federal bank regulator, recently released a proposed guidance that would eliminate some of the worst features of overdraft programs-such as ordering transactions to maximize fee income. However, the proposed rule has a glaring flaw—it puts bank-based payday loans, also known as deposit advance loans, in the same category as overdraft loans. Bank payday loans and overdraft loans are entirely different beasts—they’re structured differently, used for different purposes, and have different risks. The two products need regulations tailored to their unique characteristics. We recently submitted our comments on these rules; you can send regulators your thoughts until August 8, 2011.
The future of the housing finance system is on everyone’s minds. It’s clear that any changes to the system could have enormous impact on the ability of people of color and low-wealth individuals to sustainably purchase a home and build wealth.
Can we trust even the most seemingly reputable public figures? How will we address the needs of our aging population? Can destroying 70,000 homes actually make a city a better place to live? And, for good measure, what is real? Our staff has a lot to think about this week.
A new regulation from the USDA could help families get through hard times without giving up hope for a better future. The Supplemental Nutrition Assistance Program (SNAP), once known as the food stamp program, provides assistance to buy food to more than 40 million low-income individuals every month. This assistance helps families put food on the table as they work towards a more secure financial footing. Until this proposed regulation, certain retirement or education savings would disqualify someone from the SNAP program—which is counterintuitive, since those very savings help people advance economically. It’s difficult to build a better life for your children when you must sacrifice saving for their education in order to keep your source of food.
“In New York State, it would take lenders 62 years at their current pace, the longest time frame in the nation, to repossess the 213,000 houses now in severe default or foreclosure, according to calculations by LPS Applied Analytics, a prominent real estate data firm.
Clearing the pipeline in New Jersey, which like New York handles foreclosures through the courts, would take 49 years. In Florida, Massachusetts and Illinois, it would take a decade.”--Backlog of Cases Gives a Reprieve on Foreclosures (David Streitfeld, New York Times)
While much of the response of the foreclosure crisis has been focused on the negative effects on homeowners, they are far from the only victims. Tens of thousands of Chicago region renters have been displaced—sometimes illegally—due to rental buildings going into foreclosure as well. The Lawyers’ Committee for Better Housing (LCBH) recently released a report that found that, in 2010, nearly 6,000 apartment buildings went into foreclosure in the City of Chicago, affecting more than 17,000 units. Every week in 2010, 123 apartment buildings went into foreclosure.
We recently reported that three banks—Bank of America, Chase, and Wells Fargo—received punitive action from Treasury for failing to meet the standards of the Home Affordable Modification Program. The three servicers had their incentive payments for successful permanent modifications and short sales suspended for one quarter—and possibly longer, if they don’t shape up. We know that homeowners are facing difficulties working with many more servicers than only those three, however. How are the rest of them doing according to HAMP’s auditors? Take a look at these charts below the jump.
The latest report on the Obama Administration’s foreclosure prevention program includes the news that Treasury has, for the first time, taken punitive action against servicers who exhibit poor performance on the Home Affordable Modification Program (see our previous analyses). HAMP has been beset by difficulties, most notably that the 608,615 permanent modifications active today fall far short of the 3-4 million homeowners that Treasury aimed to reach. Consumer advocates have called for Treasury to take action against servicers who lose borrowers’ documents, give them conflicting or counterproductive advice, and erroneously reject borrowers from the program. We are pleased to see that Treasury is withholding incentive payments from three servicers in need of substantial improvement: Bank of America, Chase, and Wells Fargo.
An amendment to the Economic Development Revitalization Act (S. 782) appeared yesterday that would essentially disarm consumers’ cop on the beat, the Consumer Financial Protection Bureau (CFPB). Amendment #391, proposed by Sen. Jerry Moran (R-KS), would seriously weaken the CFPB’s ability to protect consumers—its only mandate. It puts the same regulators who failed to restrain the reckless subprime lending that led to the housing crisis in a position to paralyze the CFPB’s ability to take action against financial institutions who are harming consumers.
Last week, I highlighted how intense the battle over the implementation of financial reform has become—even more so than the fight to get it passed. The hundreds of question marks left to be answered in the Dodd-Frank Act will ultimately decide whether there will be real change that makes our financial system work better for consumers or whether it will kowtow to the interests of the financial industry.
A week after Rep. Patrick McHenry (R-NC) took Elizabeth Warren to task during a Congressional hearing and called her a liar, she’s been invited back to spar with another famously feisty opponent: Rep. Darrell Issa (R-CA). Issa’s letter to Warren says:
The Financial Times reported yesterday that the New York Fed is investigating a whistleblower letter from Goldman Sachs’ servicing unit, Litton Loan. The charge? Litton failed to review borrowers’ HAMP modifications in a “denial sweep” strategy meant to quickly work through a backlog of applications. FT reports: