Prepared Remarks for Secretary of Housing and Urban Development Shaun Donovan at the 2009 National Urban League Conference

McCormick Place Convention Center
Chicago, Illinois
Thursday, July 30th, 2009

Thank you, Marc - for that very generous introduction. Many thanks also to your board and host affiliate here in Chicago, particularly its president, Cheryle Jackson.

I also want to thank the panelists following my remarks - Dr. Michael Eric Dyson, Michelle Bernard, and Jeff Johnson. Also, Stephanie Jones and Gwendolyn Grant, as well as Dr. John Jackson with the Schott Foundation and Melissa Harris-Lacewell.

It's a pleasure to be with all of you - with so many service providers, local officials, affiliate presidents, and professionals in the health, education, housing, and financial services fields.

Thank you for this opportunity to speak for the first time to you as our nation's fifteenth Secretary of Housing and Urban Development. In fact, the National Urban League had been in existence for more than a half century when Robert Weaver became the first Secretary of HUD and the first African-American Cabinet member in our nation's history.

Certainly, this moment reminds us that the "Path to Power" cannot be charted on a straight line. Just as the election of President Obama represents the culmination of quite literally centuries of aspirations and commitment, hope, dreams and sacrifice - an achievement that would not have been possible without the National Urban League - we know that the challenges the President inherited could not be greater.

When President Obama took office, we were facing the greatest economic crisis in a generation. Our economy was on the precipice of a second depression or great recession.

We were losing, on average, 700,000 jobs a month. Our economic growth rate was the worst in a quarter-century.

Foreclosures were at record levels and residential investment had fallen by more than 40 percent in just eighteen months.

Banks were in crisis and credit was frozen solid.

In just over 150 days, the Recovery Act - along with our other economic initiatives - has worked to stabilize economic conditions and help those harmed by the economic crisis.

By June, we had reduced the number of jobs the economy was losing by a third.

Today, 95 percent of working families are seeing the benefits of the Making Work Pay tax credit in their paychecks.

And more than 38,000 Recovery Act projects have been approved - from community health center expansions to transportation construction jobs.

With the housing crisis at the root of our economic crisis, HUD has been quite literally at the center of our 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 - including $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 using those dollars to encourage state and local governments to develop new and innovative ways to improve public housing and rebuild communities. We're partnering with the Department of Labor to connect the workforce investment system to community action agencies implementing Recovery Act weatherization efforts.

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.

When it comes to putting Recovery Act funds to work creating jobs, aiding states and jump-starting shovel-ready projects, I'm proud to tell the National Urban League today that we're right on-schedule - in many cases, ahead of schedule.

That doesn't mean we're in recovery yet - but 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-four participating servicers have extended offers on over 370,000 trial modifications so far.

We are starting to see progress. Sales of new single-family homes were up 11 percent in June - the largest monthly increase in 8 years - home prices are stabilizing, and 200,000 loan modifications are already underway at a rate of 20,000 per week.

We're on track to do exactly what we'd said we would when we announced the program in February.

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.

Borrowers need to take the first step towards relief.

And counselors must be ready to provide answers.

As a National Intermediary providing one-on-one counseling to nearly 50,000 families with HUD grant funds, you know this as well as anyone. Already, the National Urban League and its affiliates are doing so much to provide homeownership, foreclosure, and financial counseling to families in danger of losing their homes.

The truth is, you have unique relationships with so many of the families that we need to come forward during this crisis.

These families 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.

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 sent loud and clear when senior Treasury and HUD staff met with servicers this Tuesday.

On August 4th, we will begin publicly reporting results under the program - and we have told all participating servicers that we expect them to modify at least a half a million loans by the first of November.

We will also begin the process of 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. 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.

I am also announcing today, here at the Urban League, the expansion of FHA's ability to do loan modifications. Beginning August 15th, tens of thousands of FHA-insured borrowers will have an opportunity to modify their mortgages and significantly reduce their monthly mortgage payment, as borrowers taking advantage of Making Home Affordable already can.

Coming less than a month after our expansion of the Home Affordable Refinance Program to assist seriously underwater homeowners, these efforts should signal to every American that the Obama Administration is absolutely committed to the success of the Making Home Affordable program and to helping as many families as possible during this difficult time.

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

And we have every intention of passing it.

A New Era of Accountability

Of course, we all know that African Americans were among the primary victims of the subprime mortgage crisis - and we know how it happened. In December of 2007, The Wall Street Journal reported that 61 percent of homeowners in subprime mortgages who could have qualified for prime mortgages were pushed into riskier mortgages by lenders and brokers.

As a result, subprimes have had widespread, devastating effects across the economic spectrum. Indeed, half of all subprimes here in Chicago are now delinquent.

The Center for Responsible Lending estimates that this crisis could lead to $352 billion in lost wealth, with the African American community being hit the hardest because of a greater share of wealth concentrated in home equity.

We are looking at a net loss in homeownership rates for African Americans.

For me, that is just completely unacceptable. I refuse to stand by and watch a generation of wealth and gains for minorities in this country get wiped out - and I know President Obama feels the same way. That should never happen in America.

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, reporting a record number of housing discrimination complaints in 2008 - and 85 percent of race-based complaints were made on behalf of African Americans.

That is one reason why my new Assistant Secretary for Fair Housing and Equal Opportunity is John Trasvina. Coming to us from 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.

With this leadership, these efforts and the strong new protections HUD is using in the Safe Mortgage Licensing Act and the Real Estate Settlement Procedures Act, we say clearly and unequivocally that if you discriminate, you won'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 particularly proud that the President's plan voiced our strong commitment to enforcing the Community Reinvestment Act and fair lending laws to ensure that underserved consumers and communities have access to financial services, lending and investment.

The Community Reinvestment Act encourages banks to meet the needs of borrowers and invest in neighborhoods that were traditionally redlined. Some have argued that it's somehow responsible for the housing crisis.

Let's be clear - CRA has brought billions of dollars to neighborhoods across the country.

There were many causes for the housing crisis - but investing in our neighborhoods was not one of them.

CRA wasn't part of the problem - but it will be part of the solution. It must be. [PAUSE]

The Civil Rights Debate of the 21st Century

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.

At a time when metropolitan regions are increasingly becoming the engine of our economy - generating 90 cents of every dollar and housing more than two-thirds of our population - 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.

Nor is it 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 can't be equal opportunity.

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 the first great civil rights debate of the 21st century.

Ensuring we as a nation have that debate is our challenge today.

Working together in common purpose, I say, "Yes, we can, and yes, we will."

Thank you - and enjoy the rest of the conference.


Content Archived: February 23, 2017