New Orleans housing advocates speak with White House

By Zoe Sullivan
Contributing Writer

Three New Orleans advocates attended a conference at The White House in mid-September to discuss housing-related issues. James Perry, executive director of the Greater New Orleans Fair Housing Action Center, Lauren Anderson of Neighborhood Housing Services, and the Rev. Willie Gable, Jr. shared their thoughts and experience with Obama administration officials and a small group of housing experts from across the country. The Leadership Conference on Civil Rights convened this group for two days of discussions with the White House. One of the main points the New Orleans contingent focused on making was the need to restore funding for housing counseling.

“In the 2010 budget, Congress eviscerated all money for housing counseling, and so since then, it’s been a struggle for organizations,” Perry told The Louisiana Weekly in a phone interview. Perry stressed that homeowners who receive counseling services are much less likely to fall into foreclosure proceedings. He also pointed out that, for those who have reached the foreclosure process, counseling also strengthens their ability to rebound and get back on track.

Anderson stressed that when individuals and families are facing tight financial situations, housing payments should be the top priority. “Homeownership is the most important means for wealth accumulation and closing the disparity with the white community,” Anderson said, speaking of Blacks and other minorities. A home is an asset that can be leveraged to help with other important investments, such as education. As a result, losing that financial base can make it more difficult to move up the economic ladder. “We’re losing the gains we’ve made over time,” Anderson said, referring to the way that foreclosures around the country have affected the wealth of minorities.

Both Anderson and Perry stressed that St. Tammany Parish is one of the places hardest hit in Louisiana by foreclosures. “Just like everywhere in the nation, the banks began to make more and more loans based on profitability rather than on the ability of the borrower to pay, and St. Tammany was no exception,” Perry told The Louisiana Weekly. He explained that since homes tend to have higher values in St. Tammany Parish, the financial problem is larger there because the mortgage debts are higher.

Anderson “We’re seeing is that this is cutting across all racial and demographic lines. We’re seeing a lot of middle-class professional people who are in trouble,” Anderson told The Louisiana Weekly. She speculated that part of the reason for the situation in St. Tammany is a mini-purchasing boom with “inflated prices” after Katrina when area residents sought to replace destroyed homes.

“In many parts of the country, they’re in a downward trend,” Anderson said of foreclosure rates. She cautioned that August foreclosure figures published in City Business are “an indication that [our foreclosure rate] is increasing.” Anderson pointed out that New Orleans currently has a lower foreclosure rate than the national average, with one out of every 703 households affected by foreclosure in Orleans Parish versus one out of 681 nationally. In St. Tammany Parish, that figure is almost double that of Orleans, with one out of every 385 households experiencing foreclosure.

Scams are a significant risk for homeowners seeking assistance, Anderson explained to The Louisiana Weekly, stressing that those in need of counseling should seek HUD (U.S. Department of Housing and Urban Development) certified organizations. “Credible, competent services are available through non-profits who will often not charge a fee,” she said.

Perry explained that counseling services weren’t the only item on the New Orleanians’ agenda. They were also concerned about the disparate impact that certain policies have on minority communities. Perry pointed to the Road Home program as one example where a policy decision disproportionately hurt African-American homeowners’ ability to rebuild after Katrina. Since the award from the program was based on the lesser of a home’s value or the cost of rebuilding, homeowners in more modest neighborhoods, ones that in New Orleans have large Black populations, found themselves with fewer resources to clean up and start over.

The third issue the advocates addressed focused on what happens to homeowners who manage to have the principle piece of their mortgage reduced. Perry cited the Qualified Principle Reduction Indebtedness Act, which passed in 2007. “The idea is that if you are underwater on your mortgage and you’ve been paying it, but you owe more than your home is worth, it would encourage mortgage holders to reduce your principle.” The problem, he said is that “the IRS will see that as income.” As a result, Perry, Anderson and Gable spoke with Gene B. Sperling, the Director of the National Economic Council, and asked for efforts to change this interpretation to one that would not further penalize struggling homeowners.

This article originally published in the September 24, 2012 print edition of The Louisiana Weekly newspaper.