Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the National Council of La Raza: A Rising Tide? Moving Our Communities Beyond the Recession

Downtown Convention Center McCormick Place
Chicago, Illinois
Monday, July 27th, 2009

Thank you, Juan - for that generous introduction and for your remarkable leadership.

It's a pleasure to be before the National Council of La Raza - before so many community leaders running non-profits, professionals, local elected officials, representatives and organizers from charter schools, community colleges, the financial services industry, and health clinics. And I want to thank all of you for this opportunity - particularly your board and president, Janet Murguía.

For more than four decades, through research, policy analysis, and advocacy, the National Council of La Raza has been bringing people together to create opportunity for Hispanic Americans.

Whether it is the corporate partnerships you feature or the homeownership and health fairs you hold, this annual conference is an opportunity to expand on those efforts.

And today, your work-and our work together-is more important than ever. Already, Latinos represent 15 percent of America's population-45 million in all-and account for more than half of all our population growth in the last decade. By the middle of the century, 1 out of every 3 people in the United States will be Latino.

At the same time, Latino participation in every aspect of society is surging - in 2008, Latino voter registration grew over 25 percent.

In every way-economically, socially, politically-Latinos have become a force to be reckoned with in this country.

But of course, with those increased numbers comes an increasing number of challenges.

Every year, a third of Latinos go without health care.

Latino children continue to lag behind-in math and reading skills-and for all our progress, still only little more than half of Latinos graduate from high school.

And of course, housing. No challenge is bigger or more profound than the foreclosure crisis at the root of our economic crisis. And no one has more at stake in how we address this crisis than our minority communities.

So, today, I wanted to say a few words about the role home plays in all of this - its close connection to opportunity, and how HUD and La Raza can work together to not only tackle this crisis in our neighborhoods, but also build the strong, vibrant, inclusive communities America's Latino community-and America!-needs to succeed in the 21st century.

A Moment for Urgency

Like so many of you here today, I believe a home is the foundation upon which we build our lives, raise our children and plan for our futures.

Home is family.

It is the source of a family's stability and the building block with which we forge neighborhoods, put down roots and build the communities that are the engines of our economic growth.

With homes so central to our success as individuals and as communities, ensuring that every American family has access to decent, safe and affordable housing is not just part of HUD's mission - it is the core of our mission.

Unfortunately, that foundation has been seriously eroded by our ongoing housing crisis. Millions of Americans have already lost their homes. Others are in foreclosure. Still others have fallen into homelessness, devastating families and communities alike. While the crisis is national in scope, four states with significant and growing Latino populations-California, Nevada, Arizona, and Florida-are among the hardest hit.

With the housing crisis at the root of our economic crisis, HUD has been quite literally at the center of the Administration's response. In February, HUD started investing nearly $14 billion under the Recovery Act in our communities - three quarters of which we allocated in the first week. That legislation included $4 billion to make improvements to public housing, $2 billion for project-based rental housing, and $1.5 billion to prevent homelessness.

We're investing an additional $2 billion in the Neighborhood Stabilization Program to help communities purchase and convert foreclosed and abandoned properties into new affordable housing, land banks, or other options that preserve neighborhoods.

At the same time, we're encouraging state and local governments to develop new and innovative ways to improve public housing and rebuild communities. We're partnering with Labor Secretary Solis to connect the workforce investment system to community action agencies implementing Recovery Act weatherization efforts - work I know your affiliate, La Casa de Esperanza, is helping carry out.

President Obama and I are committed to making green building an engine of economic growth, jobs and opportunity in cities across the country. Pioneering the first wave of green technologies will require a new generation of professionals - mechanics, electricians, plumbers, and construction workers.

People of color, in large part, missed the tech revolution of the 1990's. That can't be allowed to happen this time around.

All of this is to say, while we are not in recovery yet, we have created the stability necessary to get us there and are laying the foundation for long-term growth.

Making Home Affordable

Central to making that possible is the President's Making Home Affordable plan - to help millions of homeowners across the country keep their homes, targeting those who have made every possible effort to stay current on their mortgage payments.

To date, nearly 1.3 million homeowners have received information about the plan. Thirty-one participating servicers have extended offers on over 350,000 trial modifications so far.

We are starting to see some signs of progress - home prices are stabilizing, construction starts are up and tens of thousands of loan modifications are already underway.

But we need to keep the pressure on. Around the country, we're working with local officials, counselors, the lending industry and community leaders to provide everyone with the resources and information they need to help homeowners access these programs.

Everyone has a role to play in making this program work - reaching out to struggling communities and spreading the word about this program.

Local officials need to encourage their constituents to ask for help.

Servicers need to step up, work hard and process applications - and I'll talk about that more in a moment.

Counselors must be ready to provide answers.

And borrowers need to take the first step towards relief.

La Raza and affiliates like the Resurrection Project, which led yesterday's Home Rescue Fair, have done outstanding work providing homeownership, foreclosure, and financial counseling to families across the country - bringing together servicers and pro-bono attorneys to help families in danger of losing their homes.

The truth is, you have unique relationships with so many of the communities that we need to lift up during this crisis.

They know you. They trust you. They respect you. And so does HUD.

We need you to be a part of the solution when it comes to helping people keep their homes - to reach out to those in need, particularly those for whom language is a barrier to help.

But I know you can't do it alone. Earlier this month, Secretary Geithner and I sent a letter to the executives of participating mortgage-servicing firms - expressing in no uncertain terms that we expected them to step up their modification efforts and dedicate senior liaisons authorized to work directly with us on all aspects of the program.

We've heard your concerns - how servicers are beginning the foreclosure process even as they are working with borrowers to modify their loans. We've also heard about homeowners being denied a loan modification who should have qualified.

That's not right. We need servicers to commit more resources to this process. That's the message we'll be sending loud and clear when senior Treasury and HUD staff meet with servicers tomorrow.

Starting next week, we will begin publicly reporting results under the program.

We will start identifying how long it takes for borrowers to get a response, the accuracy of information they're being provided, and-above all-how long it takes for applications to be completed.

No family should ever lose their home because their servicer took too long to even tell them whether they qualified for assistance.

To me-to President Obama-that's completely unacceptable. And it can't be allowed to continue - not with so much on the line.

That's why we've asked Freddie Mac, in its role as compliance agent, to develop a "second look" process, in which they will audit a sample of Making Home Affordable modification applications and determine how many have been wrongly or inadvertently declined.

We are absolutely committed to making sure that Making Home Affordable helps as many families as possible stay in their homes.

Each generation faces a test - whether it's World War Two or civil rights.

For the Obama Administration, facing down this housing and economic crisis and protecting our neighborhoods is our test.

And I have every intention of passing it.

A New Era of Accountability

This crisis offers an opportunity to reshape our communities to be more integrated, accessible and inclusive - foundations of equal opportunity in all aspects of our daily lives and our families' futures. At the White House, Adolfo Carrion is leading the President's urban policy and is a champion for the change that is so vitally needed.

All of us recognize that the Hispanic community was one of the primary victims of the subprime mortgage crisis. The Wall Street Journal reported in December of 2007 that 61 percent of those in subprime mortgages could have qualified for prime mortgages but were pushed into riskier mortgages by lenders and brokers. As a result, subprimes have had widespread, devastating effects across the economic spectrum.

The Center for Responsible Lending estimates that this crisis could lead to $352 billion in lost wealth.

I refuse to stand by and watch a generation of wealth and gains for minorities in this country get wiped out.

And so for me, just as important as stopping foreclosures is ensuring that this crisis never happens again. That's why we've requested $37 million for an agency wide initiative to Combat Mortgage Fraud and Predatory Practices - a third of which will go to curbing discrimination through increases in HUD's fair housing activities.

Last month, HUD released its annual Fair Housing Report detailing the number of housing discrimination complaints throughout the country. We are reporting a record number of housing discrimination complaints in 2008 - but less than 8 percent of these complaints are national origin cases on behalf of Latinos. You and I both know that the scourge of discrimination is far greater.

That is one reason why my new Assistant Secretary for Fair Housing and Equal Opportunity is John Trasvina. He has worked side by side with many of you over the years as president and general counsel of the Mexican American Legal Defense Educational Fund. He brings to HUD the expertise and energy to build relationships and vigorously enforce the law when it comes to housing discrimination.

The right to own or rent a home without discrimination should never depend on how well one speaks English. Not in America.

HUD's Office of Fair Housing and Equal Opportunity now has fair housing brochures, vital documents and other information in English, Spanish and eleven other languages. You will see and hear our public service announcements on predatory lending on Spanish language radio, TV and in print.

We are currently assessing the language capabilities of each of our regional and district fair housing offices.

And with bias crimes against Hispanics as documented by the FBI higher than they have been in years, it comes not a moment too soon.

We will work closely with the Department of Justice to enforce the federal protections against hate crimes and defend people's right to live where they choose without fear of intimidation or violence.

With these efforts and strong new protections HUD is using in the Safe Mortgage Licensing Act and the Real Estate Settlement Procedures Act, we say clearly and unequivocally what you have been saying in board rooms and town halls, and from anywhere you can:

It's time to tell those who discriminate or prey upon seniors or people who face cultural or language barriers:

Basta! You can't get away with it anymore - and you will be held accountable for your actions.

The time has come to ensure that the kind of behavior on Wall Street that put our families and neighborhoods at risk is put to an end.

Last month, I joined President Obama as he unveiled the Administration's plan to rebuild trust in our markets by creating a Consumer Financial Protection Agency that focuses exclusively on protecting consumers - and nowhere is the need clearer than mortgage lending where so many were taken advantage of.

I'm optimistic about what the President's plan means for HUD, for our housing markets in general and for the confidence we need to get our economy moving again.

And we need your help to ensure it is passed into law as soon as possible.

A Matter of Social Justice

I've only begun to touch on our vision at HUD to build stronger, more inclusive, and more sustainable communities - not just environmentally sustainable, but socially and economically sustainable. And I hope we can talk more about in the question and answer session to follow.

But allow me to conclude my remarks with these parting thoughts: It's not a coincidence that the neighborhoods with the least access to transportation, good schools and jobs are the ones hit hardest by the foreclosure crisis.

It's not a coincidence that we can determine a child's life expectancy by the zip code they grow up in.

What it is, is a tragedy.

A tragedy that reminds us that if there isn't equal access to safe, affordable housing in this country - there isn't equal opportunity.

Whether it's my experience at HUD, in New York City or in the private sector, I believe that when you choose a home, you don't just choose a home - you also choose schools for your children and transportation to work.

You choose a community - and the opportunities available in that community.

Whether it's pushing back against foreclosures, making affordable rental housing a priority in this country, or planning our communities in a more integrated and inclusive way, how we develop our national housing policy in this moment of national crisis is poised to be one of the great civil rights debates of the 21st century.

Ensuring it becomes one is our challenge today.

Indeed, working together and in common purpose, I believe it can be one of our most lasting achievements. For the sake of every American, it must be.

Thank you for this opportunity - and I look forward to your comments and questions.