EmmettFoundations and the Foreclosure Crisis

By: Emmett Carson In: 2009 Annual Conference

5 May 2009

The breakout session on the foreclosure crisis ["The Foreclosure Crisis: A Blueprint for Foundation Intervention"] began with the unnerving observation that out of 56 million outstanding mortgages this year, 8.1 million homes have been lost and 800,000 have had foreclosure procedures started. The panel went on to observe that the programs that are being developed to help will come too late for devastated low-income communities (often black and brown households) that were the target for subprime lenders and will largely assist families who have conventional loans and who are more likely to be white. Despite all of the talk, there have only been several hundred loan modifications. Unbelievably, loan modifications have a re-default rate of 41 percent, and 32 percent of the modifications resulted in the loan amount being increased. 

The panel cautioned that we not accept the false notion that the foreclosure crisis was due to the Community Reinvestment Act. They argued for foundations to convene their communities to think through how to work with lenders to create better outcomes, public information campaigns, and research on who is affected. There also is a unique opportunity for foundations to support regulatory and legislative reform, which is occurring at both the state and national levels. The example of the Goldseker Foundation is that small grants can make a significant difference. Can the Council create a space for foundations to share information, ideas and experiences? It would be a real time benefit if they would do so. The next issue that we will face is how will we provide housing for all of those who have lost their homes? There is much work for us to do in this new era of philanthropy.

Emmett Carson is president of The Silicon Valley Community Foundation.

3 Responses to Foundations and the Foreclosure Crisis

Patti Gilhousen Guptill

May 5th, 2009 at 2:58 pm

Can you share what the Goldseker Foundation’s small grant was for?

Rick Leon

May 5th, 2009 at 6:32 pm

The Neighborhood Funders Group (NFG) was very pleased to be able to sponsor yesterday’s workshop on the foreclosure crisis. We want to express our thanks to our expert panel that provided such in-depth information on foreclosure and how foundations can help in this crisis.

The NFG-commissioned report of the same name, “The Foreclosure Crisis: A Blueprint for Foundation Intervention,” will be going to print in a few days and provides extensive information on the current state of the foreclosure crisis. It also presents original data on foundation foreclosure interventions from an NFG survey of foundations about specific steps funders are taking to address foreclosures. This includes information on foreclosure response efforts from the Goldseker Foundation. Our survey responses provide a “blueprint” for other philanthropic organizations on intervention strategies. This publication is free to members of NFG. It may be purchased by non-members for $20. A PDF version will also be available for $15. Please send an e-mail to nfg@nfg.org to order.

NFG will also be hosting a Teleconference call on foreclosure with the same expert panel as yesterday’s breakout session on May 26th at 1:30 pm (EST). Please send an e-mail to nfg@nfg.org for more information.

Pat Krackov

May 6th, 2009 at 2:29 pm

Foundations might want to facilitate information exchange among groups conducting foreclosure prevention counseling and legal services regarding what they are seeing on the ground related to loan modifications. For example, are lenders taking advantage of the incentives provided under the Administration’s $75 billion plan,and if not, why? Advocates in CA are asking groups if they have an interest in monitoring compliance with the plan, and new CA State legislation that is due to be fully implemented later this month or early the next, and if so, what sort of tool could be developed to help groups do this. Toward that end, Foundations could play a role in convening front-line providers and advocacy groups to see if there is common interest in using data to inform policy.

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