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Just Thoughts is the blog of the Empire Justice Center, New York’s statewide, multi-issue, multi-strategy public interest law firm focused on changing the “systems” within which poor and low income families live. Here staff and guest authors will share stories, announcements and perspectives on timely issues related to our work.    



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CFPB Publishes Complaint Narratives - What it Means for New Yorkers

Issue Area: Consumer

On June 25, 2015, the Consumer Financial Protection Bureau (CFPB) published over 7,700 consumer complaint narratives about financial companies.  Since first making the complaints database public in 2013, CFPB has been improving access to and search capabilities for the data collected.  The ability to view consumer complaint narratives may be the most significant change in this access yet.

The CFPB began accepting complaints as soon as it opened its doors in July 2011.  Three years later, in July 2014, the CFPB announced that they would begin making narratives associated with those complaints public.  They faced stiff opposition from the lending industry.  To address opposition, CFPB Director Richard Cordray responded to industry concerns stating “By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem.  There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole.”

I have done a review of a subset of complaint narratives, specifically those that were filed in New York and were related to servicing mortgages in default.  In just three months, 44 of the complaint narratives that were submitted by New York homeowners trying to save their homes from foreclosure were published publicly.  These public narratives for NY homeowners reveal interesting, although unsurprising, trends. 

First, mortgage servicers repeatedly transfer servicing from one servicer to another.  This makes it nearly impossible for homeowners to keep track of where to send their mortgage payments.  Second, servicers make repeated requests for documents they have already received from the homeowner.  Third, servicers regularly fail to notify homeowners within five days upon receiving a modification application as required by CFPB’s mortgage servicing guidelines.  For a more in depth look at the CFPB complaints database, check out USPIRG’s analysis (US Public Interst Research Group).
 
I commend the CFPB for moving forward with making these consumer complaint narratives public and searchable.  Those who are in the business of providing consumer finance products should be held to the highest standard.  These companies have access to resources not within the reach of most consumers.  Publishing complaint narratives is another step toward leveling the playing field for all consumers. 

Consumers can now file a complaint with the CFPB at http://www.consumerfinance.gov/complaint/ and utilize a critical tool to educate and empower themselves in the financial marketplace.



Tags: Consumer Complaints | CFPB | mortgage servicers | foreclosure prevention





Winning with tenacity- Empire Justice helps save another home from foreclosure

Issue Area: Housing

Dave is the epitome of tenacity. For more than four years he’s been fighting tooth and nail to save his family’s home from foreclosure.  A single father of three and a Navy veteran, Dave was unable to work after a back injury during his service.  So he used his savings to pay his mortgage, until that was no longer an option.

In 2011 his lender filed a foreclosure action against him, and he faced the possibility of losing his home.

Throughout the four-year process of fighting foreclosure and applying for a loan modification, Dave received what seemed like a never ending flood of repeated document requests. At each turn we helped him gather and submit the tax forms, the benefit letters, and the bank statements. Only to have the banks come back and say they didn’t receive them or requesting more information, leading to the entire process being repeated.

All in all, we submitted 15 loss mitigation packets—an extraordinary amount for a typical foreclosure case—each totaling over 80 pages.

But Dave was determined. He wouldn’t give up, and neither would we.

Together we tried every option available. Our advocates escalated the case several times, and each time the bank claimed that they didn’t own the loan, that their “hands were tied.” Dave contacted the press, he contacted the Veterans Administration, and he filed a complaint with the Consumer Finance Protection Bureau (CFPB). We highlighted his case in our policy report, In the Eye of the Storm: Why the Threat of Foreclosure Damage Continues (link), putting pressure on policymakers to support neighborhoods and homeowners like Dave.

It is this type relentless advocacy - tenacity - that ultimately leads to a win.

Utilizing all of our advocacy tools, we convinced the bank to take responsibility for the loan, and they gave Dave the modification he needed to afford his monthly payments.  Now he and his three kids can stay in the house that for the last 13 years they've called home.

Congratulations, Dave!


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While we celebrate this success, we recognize that there are many homeowners that face the foreclosure process alone, without an attorney. Your support helps us represent more homeowners—stabilizing neighborhoods, communities, and families. Thank you.


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US Supreme Court Upholds Disparate Impact Standard under the Fair Housing Act

Issue Area: Housing, Consumer

One of the more notable, though less noted decisions coming out of the U.S. Supreme Court in the past week was its ruling on June 25, 2015, to uphold the long-standing tenet that the Fair Housing Act prohibits policies that have a discriminatory impact, even if the discrimination was not intentional. 

Texas Department of Housing and Community Affairs v. Inclusive Communities Project was brought by a Texas group who challenged the state’s housing agency’s issuance of tax credits for the development of affordable housing.  The group contested that the housing built through these credits was being concentrated in racially segregated, African-American and Latino neighborhoods in Dallas.  The effect of the policy, they argued, has a “disparate impact” on minorities and thus violates the Fair Housing Act (FHA). 

The FHA makes it illegal to refuse to sell, rent, “or otherwise make unavailable” housing to anyone because of race, national origin, gender, familial status, and disability.  The 5-4 decision authored by Justice Kennedy emphasizes that a broad-reading of the statute is necessary to combat discriminatory conduct.  For as the court noted, “Recognition of disparate-impact liability under the FHA also plays a role in uncovering discriminatory intent: It permits plaintiffs to counteract unconscious prejudices and disguised animus that escape easy classification as disparate treatment.  In this way disparate-impact liability may prevent segregated housing patterns that might otherwise result from covert and illicit stereotyping.” (Texas Dept. of Hsg.  v. Inclusive Communities, at 17-18).

Fair housing and anti-discrimination advocates are cheering the decision because strong and effective fair housing laws are vital to ensuring equal opportunity in housing.  Governmental policies such as zoning laws or enforcement of housing codes may seem benign on their face, but have detrimental discriminatory impacts.  The same holds true for private corporations such as developers, real estate professionals, and lenders – programs that seem neutral on paper may in fact further disenfranchise people. 

This decision is a tremendous victory not only for those communities, but for all of us.  Equal opportunity and freedom from discrimination benefits everyone.