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Woodstock Developments

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

January 20, 2011


From the President: Tax-time Savings Bonds: Stay within Asset Limits to Preserve Public Benefit Eligibility

Dory Rand For the first time, all tax filers have the opportunity to easily grow their savings by purchasing Series I U.S. Savings Bonds directly through their federal income tax returns in 2011. Tax filers may buy bonds for themselves, their children or grandchildren, or others. This is a welcome development that will help many lower-wealth taxpayers use some of their tax refunds to build savings and assets in a safe and simple way.

While the savings bond program is a great tool to build assets for working families, low-wealth tax filers should proceed with caution when deciding how much money to invest in bonds.


Dory Rand on Sargent Shriver's Legacy

I was saddened to learn that Sargent Shriver had died. A great humanitarian and brilliant public servant, he will be sorely missed. Fortunately, there are people around the world who will continue the work against poverty and injustice for which he is so well known.


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Thousands of abandoned foreclosures, unregistered vacant homes may be costing Chicago as much as $36 million, says new report

Thousands of vacant homes in the City of Chicago are likely poorly maintained, lack clear ownership, and threaten to destabilize neighborhoods, says a report released by Woodstock Institute.

The foreclosure crisis has exacerbated ongoing concerns about the impacts of vacant homes on communities. The loan servicer, who is the typical steward of a property throughout the foreclosure process, may choose to reduce the costs associated with a long-term vacant home by walking away from the foreclosure process instead of completing it or may avoid maintaining a vacant home up to local code standards. In both cases, the vacant home is subject to limited or no oversight and poses a substantial risk to the surrounding community, such as lowering property values, attracting criminal activity, and causing blight.


Related: Left behind: Lender walkaways amplify negative effects of foreclosure in hardest-hit neighborhoods

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One, two, three banks are out of the old RAL game: Regulator orders HSBC to stop financing high-cost tax time loans

2010 was a heartening year for consumer advocates working to eliminate income tax refund anticipation loans (RALs), the high-cost loans that strip assets from low-wealth tax filers. First, the Office of the Comptroller of the Currency (OCC), the federal regulator of national banks, issued a policy statement regulating the provision of RALs that strengthened its hand compared to previously unenforced policies. On the heels of that announcement, Chase announced it was leaving the RAL business. Chase was the second of the three major banks who provided RALs to withdraw, following Santa Barbara Bank & Trust’s forced exit in 2009. In August, the IRS announced it would stop facilitating the preparation of RALs by providing information on a borrower’s debts to tax preparers. Finally, the year ended with more happy news: the OCC ordered the third main RAL provider, HSBC, to stop providing RALs, leaving H&R Block without a bank partner for the upcoming tax season. Republic Bank and Trust, an FDIC-regulated bank that is currently the last bank around to provide RAL financing, is even limiting the amount of funding available to its RALs, including those arranged by Jackson Hewitt. With few financing options left for tax preparers who want to make wealth-stripping loans to working families, this could be the beginning of the end for RALs as a meaningful market.


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National Community Reinvestment Coalition alleges that lenders are disproportionately limiting people of color’s access to credit

Lack of credit availability is a key concern for the housing market recovery. As we discussed in our latest report, lenders are tightening standards as foreclosures and other recession-related negative credit events are taking a hit on many borrowers’ credit scores. For example, the Federal Housing Administration recently changed their policy so that they will only insure loans to borrowers with a credit score of 580 or higher for their standard lending program. However, reports have shown that some FHA-approved lenders are requiring even higher standards for FHA loans. The National Community Reinvestment Coalition, on whose board our president Dory Rand sits, is taking issue with that practice. NCRC recently filed fair housing complaints with federal regulators alleging that many top FHA lenders have underwriting policies that disparately restrict people of color from access to credit.


Related: New report finds dramatic gap in credit scores between communities of color and predominantly white communities in Illinois

Related: Leaders come together to find solutions to credit barriers

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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 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: City of Chicago NSP helps woman find perfect home in Oakland

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In this issue

  Recent Work

File IconLeft Behind: Troubled Foreclosed Properties and Servicer Accountability in Chicago
January 2011 

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   

  [+] View All Publications


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