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Woodstock Developments

A monthly update on new research, analysis, and advocacy from Woodstock Institute

December 20, 2010

 

From the President: ‘Twas a good year, but much more to do in 2011!

Dory Rand Looking back on the past year, I am thankful that financial justice champions made significant progress at the local, state and national levels. While we certainly did not get everything we asked for on our wish lists, we got more than the equivalent of lumps of coal in the form of new laws, rules, and programs. Woodstock Institute was pleased to collaborate with colleagues on many of the 2010 successes, including the following:

  • The Dodd-Frank Act, which enacted far-reaching financial reform including the creation of a new Consumer Financial Protection Bureau
  • Implementation of credit card reforms under the CARD Act
  • New overdraft loan consumer protections requiring that consumers “opt in” to the program

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Leaders come together to find solutions to credit barriers

The concentration of low credit scores in communities of color raises concerns about the prospects for economic recovery in those neighborhoods, since credit scores are becoming increasingly important in more walks of life. Not only will it be more difficult to access affordable home, small business, and car loans, but having low or no credit scores can impact the availability of rental housing, affordable utilities and insurance, and even employment. Given these challenges, what can be done to improve opportunities in Illinois’ communities of color?

We gathered top leaders from financial institutions and community groups to discuss the scope of the problem and current approaches to improving access to credit.

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Journalist calls for “a jailout, not a bailout”

Credit-default swaps. Derivatives. Collateralized debt obligations. Mortgage-backed securities. How many people on the street do you think could accurately define these terms? These financial “innovations” play a critical part in the story of the financial crisis, but average Joes—even above-average Joes—struggle to understand the role these instruments played. At our screening and discussion of “Plunder: The Crime of our Time,” journalist Danny Schechter proposed a framework for discussing the financial crisis that relies less on financial wonkery and more on a moral narrative.

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Related: What was behind ShoreBank’s closure, and what does it mean for the future?

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Advocates brave the snow to warn consumers of payday loan dangers

On a cold Monday morning under a persistent snowfall, strains of holiday carols could be heard outside of a Chicago payday loan store. These were not your usual carols celebrating sleigh rides, mistletoe, and peace on Earth; indeed, these carols had a less cheery message.

“Payday Loans, Payday Loans
It’s Christmas Time in the city
Hear them ring, ring-a-ling
Soon there will be bankruptcies!”

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Related: Don’t let the Payday Grinch steal your holidays

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What are servicers doing with borrowers after denying a permanent HAMP modification?

We wrote about some new Treasury data that found that most borrowers whose HAMP modifications were canceled have not yet lost their homes. We decided to dig a little deeper into the data and look at what individual servicers are doing with borrowers they did not approve for a permanent modification (click on link for chart):

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Related: Most canceled HAMP borrowers remain in homes, though modification growth is stalled: October

Related: New bill could improve accuracy and fairness of foreclosure process

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Looking for information on the foreclosure crisis in the Chicago metro area?

Visit the Regional Home Ownership Preservation Initiative's website at www.regionalhopi.org. The RHOPI site is a one-stop shop for foreclosure information in the Chicago region, such as success stories of local efforts to forge solutions to the foreclosure problem, events, resources for homeowners and renters in trouble because of foreclosure, regional and national research, and data and indicators.

New at RHOPI: Condominium foreclosures, barriers to credit pose challenges to recovery

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In this issue

  Recent Work

File IconBridging the Gap: Credit Scores and Economic Opportunity in Illinois Communities of Color
September 2010

File IconPaying More for the American Dream IV: The Decline of Prime Mortgage Lending in Communities of Color
May 2010 

File IconGovernment Interventions Have a Limited Impact on Chicago Area Foreclosure Activity in 2009
February 2010   

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