 Over
100 residents of Cleveland’s east side neighborhoods gathered
in February for Reinvesting in Our Communities – a half-day
summit sponsored by the East Side Organizing Project (ESOP).
The neighborhood summit focused on the increasing number of foreclosures
due to redlining and predatory lending in Cleveland and surrounding
communities.
“Where are the banks? We ask this when we see our youth giving
half of their paycheck to payday lenders. Where are the banks? We
ask this when we see our seniors facing foreclosure on their homes,”
said ESOP leader Barbara Anderson.
Anderson went on to link increasing foreclosures, racial steering
and a sharp rise in subprime lending back to predatory lenders.
“But it doesn’t stop there. The predatory lenders would
never have created this mess if the banks hadn’t abandoned
us.”
Presenter Paul Bellamy of the Lorain County Reinvestment Coalition,
helped connect the dots for guests on why bank reinvestment is crucial
to ending the onslaught of abusive lending practices. Bellamy showed
several charts that illustrated the chilling fact that Cleveland
foreclosures began to escalate when unemployment rates were at their
lowest.
“This isn’t an issue about income, rather it is an issue
related to wealth and the ability to hold onto that wealth from
generation to generation,” said Bellamy.
A map created by the Chicago-based National Training and Information
Center (NTIC) clearly depicted a majority of the total number of
foreclosures within the boundaries of Cleveland’s minority
census tracts.
“The explosive growth of foreclosures is not due to a bad
economy. And no, the foreclosures aren’t happening across
the border, either. There’s something wrong with this picture!”
exclaimed ESOP President Inez Killingsworth.
In November 2002, ESOP held a public meeting to demand the Cuyahoga
County Commissioner’s office “stop the foreclosure epidemic.”
Demands included a 180-day moratorium on foreclosures to address
the out-of-control foreclosure department, which has tripled in
the number of foreclosure filings in the past three years.
Ninety percent of all these cases are filed as default or summary
judgment, meaning that no homeowners are getting a hearing.
ESOP also demanded that a Mortgage Fraud Enforcement Taskforce be
created to tighten investigative and enforcement efforts of predatory
lenders.
At the reinvestment summit, Cuyahoga County Commissioner Peter Lawson
Jones reassured ESOP members that he heard ESOP demands loud and
clear.
“I
will make sure we set your Mortgage Fraud Taskforce in motion in
the next two months,” Jones said.
Killingsworth also targeted Third Federal Savings and Loan for ignoring
Cleveland’s low-income and minority neighborhoods. Third Federal’s
2001 Home Mortgage Disclosure Act (HMDA) numbers show that while
Third Federal is ‘Ohio’s leading mortgage lender,’
they are redlining a whole section of Cleveland’s east side
neighborhoods.
“These are their numbers. Their numbers don’t lie. They
aren’t making the loans in our neighborhoods,” Killingsworth
said. Third
Federal’s loan applications and originations in 2001 include:
- Third
Federal took less than half the city average of loan applications
from low-income census tracts and about 25 percent fewer applications
from moderate-income census tracts;
- Third
Federal took 52 percent of its applications in middle-income census
tracts while the average lender only took 28 percent applications
in middle-income tracts;
- Third
Federal made just eight percent of its loans in African American
census tracts. This less than one-third the the average lender
who originated 26.63 percent of its loans in African American
census tracts; and
- Third
Federal managed to make 55 percent of its Cleveland loans to white
census tracts while the average lender made 41 percent of its
loans in those tracts.
“We
tried to negotiate in good faith but Third Federal doesn’t
seem to understand what we are saying,” said ESOP leader Emma
Adams. “I guess we need to take our communication to a different
level.”
“We are calling on y’all to take action. We will bring
Third Federal to the table and show them how to become a CRA partner,
reinvesting in our communities,” Killingsworth added.
Echoes of “CRA is here to stay, CRA won’t go away,”
was the audience response, bringing ESOP’s Reinvestment Summit
to a close.
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