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.