The CFPB is soliciting a third round of comments on its Know Before You Owe project to simplify disclosure forms used in the mortgage process.  The agency last week extended the deadline to this Wednesday.

As the number of foreclosure filings continue to outpace loan modifications and other foreclosure prevention strategies, more and more homes are becoming vacant in the Chicago region. More than 95 percent of completed foreclosures in the six-county region in 2010 became owned by their lenders and likely remain vacant, data from Woodstock Institute show. Moving families back into these homes would counteract the destabilizing influences of vacancy and set neighborhoods on the path to recovery. While new household formation is on the rise and should contribute to an increased demand for homeownership, access to mortgage credit has become sharply constricted.

“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.

When it takes a long time to create a problem, it often takes even longer to fix it. In Black Wealth/White Wealth: A New Perspective on Racial Inequality, Melvin L. Oliver and Thomas M. Shapiro illustrated how various American tax, property and financial policies and practices precluded generations of African Americans from building wealth and created intergenerational poverty, the effects of which continue to reverberate today. The gains that some African Americans and other people of color made in wealth creation through home ownership, small business development and educational attainment during the late 1990s and early 2000s were all but wiped out by ongoing the financial and foreclosure crisis. If left unaddressed, the racial wealth gap will continue to grow.

With estimates showing a shadow inventory that numbers in the millions, it’s clear that the foreclosure crisis is not done wreaking havoc on the housing market. It seems that the ideal outcome for families, communities, and investors alike would include avoiding as many foreclosures as possible and keeping homes occupied. A number of strategies have been deployed in support of this goal, some more effective than others. One thread is common among the diverse array of approaches: the importance of HUD-certified housing counselors, who were hit with a major funding cut in the FY 2011 budget. Please take action this week to help get this funding restored for the 2012 budget.

Don't forget--this Thursday, representatives from the U.S. Department of the Treasury, CitiMortgage, National Community Reinvestment Coalition, Community Investment Corporation, and Oak Park Regional Housing Center will debate the impact of proposed changes to the housing finance system on communities of color and low-wealth communities at a panel we're hosting at the Federal Reserve Bank of Chicago.