Without Bankruptcy Help, More Than Half a Million Homeowners Will Be Left Out in the Cold

Wade Henderson, president of the Leadership Conference on Civil Rights, made the following statement regarding rumors that bankruptcy has been dropped from the housing package:

“If the Senate foreclosure agreement doesn’t include a bankruptcy provision, it’s not a solution. Without the Helping Families Save Their Homes in Bankruptcy Act, this bill amounts to dancing around a fire when Congress is supposed to be putting it out.

When the government can bail out Bear Stearns – a company that made a fortune in bad mortgages – it can surely ease the strains of ordinary American homeowners who aren’t as sophisticated as a Wall Street firm, and help them keep their biggest asset.

The impact on more than half a million homeowners is just as important and has just as broad an effect on the economy as one big time investment firm whose overseers played ‘fast and loose’ with its lending.

The civil rights community will not go quietly if bankruptcy reform isn’t part of Congress’ response.  For years, the lending industry – the same industry that is lobbying hard against bankruptcy provisions – reaped enormous profits by preying on Latino and African-American borrowers with good credit by steering them into bad loans. 

As this legislation continues to work its way through the political process, Congress needs to step up and do the right thing by the 600,000 families who are counting on them.”