Remarks of Secretary Shaun Donovan at the National Action Network's 13th Annual National Convention

Sheraton New York Hotel & Towers, New York, NY
Wednesday, April 6, 2011

Thank you, Reverend Sharpton, for that kind introduction, and for your extraordinary lifetime of leadership.

Not only have you fought for social, racial, and economic justice for over four decades, but your work reminds us all in Washington of a profound truth -- that for all the debates we have over policies and programs, job numbers and budget priorities, our work is about people.

It is about the families we serve, and the communities we are rebuilding in the wake of the housing crisis. Indeed, it is about what the old tradition calls "the least, the last, and the lost."

My boss, President Obama, who you will be hearing from this evening, understands that -- and I understand it, too.

So, thank you for the moral voice you bring on behalf of the most vulnerable Americans, and thanks as well to Dr. Richardson and Tamika Mallory. It's good to be back.

So many of you have been touched by the foreclosure crisis, whether you experienced the shock and pain of losing a home, or saw the effects foreclosures have had on your neighborhoods and communities.

So, as we mark April as Fair Housing Month, I'd like to talk to all of you about the work HUD is doing to push back against that crisis to ensure that every American family has the housing and opportunity they need to be a part of what President Obama calls "winning the future."

Winning the Future by Pushing Back Against Foreclosures

We all know how the foreclosure crisis rolled back 15 years of gains in some urban cores.

You don't even have to leave New York to see the devastation this crisis wrought on minority communities in particular -- just jump on the "E" train to Jamaica, Queens, which for decades has been a bastion of the black middle class.

Just a decade ago, Queens was the only county in the United States where African-American families earned more on average than White families.

Yet by 2005 some 60 percent of homes in the Jamaica neighborhood were financed by risky, sub-prime loans.

There's a term for that turn of events:

"Predatory lending"

And we all saw what happened next, as Jamaica was devastated by the foreclosures.

But I'm here to tell you that this Administration is pushing back. President Obama and I are committed to making sure that families that try to do the right thing--the responsible thing--have every opportunity to stay in their homes.

It starts with the housing counseling we've provided to 6 million families over the last two years to help keep their homes.

According to NeighborWorks America, distressed homeowners working with a housing counselor are nearly twice as likely to receive a modification on their mortgage.

I've seen for myself the difference counselors can make.

Last year in Oakland, with Congresswoman Barbara Lee, I met an elderly widow named Elizabeth Gilmore who had been stuck in limbo with her servicer for over a year -- unsure if she was ever going to get the loan modification she needed to save her home from foreclosure.

Hers was the kind of story we've heard about time and again -- families doing everything they can to do the right thing, only to find themselves overwhelmed by what is sometimes a daunting process.

But at HUD's Help for Homeowners event in Oakland, she was able to sit down with a HUD-approved housing counselor and work out a modification with a payment she could afford to save her home.

That's why I believe the vast network of housing counselors that HUD funds remains one of our greatest strengths -- and it's why we asked for $168 million for housing counseling in our proposed 2012 budget.

These funds are more important than ever. They make a difference -- and we are going to do everything we can to ensure we get them, even in these tight fiscal times.

This Administration is committed to ensuring that every responsible family who needs help gets help. That's why since this crisis began, we've worked to provide families with the assistance they need to stay in their homes.

More than 4.4 million families have received restructured mortgages since April 2009 -- more than twice the number of foreclosures completed in that time.

Of course, foreclosures don't just harm families -- they devastate communities, as neighborhoods face vacant and abandoned homes, blight, and plummeting property values.

To fight that vicious cycle, HUD has pumped $7 billion into our hardest-hit neighborhoods buy up foreclosed and abandoned homes and turn them into the affordable rental housing that families need.

In neighborhoods like one in East Cleveland, we've seen how this funding has reduced vacancy rates by nearly 40 percent in two years' time.

Despite this progress, some in Congress want to terminate these programs -- without proposing any kind of alternative.

So, let me be perfectly clear:

President Obama has promised to veto these bills if they reach his desk. And he won't hesitate to do it.

These programs are too important to our families--and to our economy--to just end them.

Let's not forget that an economy that was falling off a cliff when we took office is growing again today- and instead of rapid job loss, more than 1.8 million private sector jobs were created last year. While we still have a long way to go, the full percentage drop in the unemployment rate over the past four months is the largest decline since 1984.

I'm not going to let them turn back the clock -- and President Obama isn't going to either.

That's not going to happen. And we need you to make your voices heard.

Now, just because this Administration opposes ending these programs doesn't mean we're satisfied with the status quo.

It's infuriating that banks can foreclose on people without even bothering to make sure they are reviewing accurate documents.

It's outrageous that banks can shuttle families facing foreclosure from one office to another, providing confusing, conflicting information.

And it's just not acceptable for banks to say they "lack the resources" to do this job right.

Now, we can't prevent every foreclosure.

But if a family is trying to rework their loan, banks should be required to give them a single point of contact.

Is that too much to ask?

If a family is trying to rework their loan, servicers shouldn't be allowed to foreclose on them at the same time.

Is that too much to ask?

I don't think it's too much to ask either.

The time has come to fix these problems and hold these institutions accountable once and for all.

And working with the task force of Attorneys General from all 50 states to make sure that banks follow the rules, that's exactly what this Administration intends to do.

Winning the Future by Protecting Vulnerable Families

Of course, ending this housing crisis requires more than fighting foreclosures -- it means supporting quality affordable rental housing as well.

That's never been truer than it is right now -- after all, this crisis took its greatest toll on those that were already struggling to make ends meet.

The results of a recent HUD survey only confirmed that, showing the largest increase in Worst Case Housing Needs in the survey's history between 2007 and 2009.

Extremely low-income families make up 72 percent of HUD-assisted households -- and more than half are elderly or disabled.

To give you an idea, the median family income last year for a family receiving rental assistance from HUD was only $10,200.

That's $10,000 to pay the rent, put food on the table, and put clothes on the backs of children.

These families need to be protected. And I'm proud to tell you that with the President's proposed budget, they will be protected.

That's why 80 cents out of every dollar HUD proposes to spend in next year's budget keeps these families in their homes and provides basic upkeep to public housing while also continuing to serve our most vulnerable populations through our homeless programs.

In all, the 2012 budget will assist over 5.5 million families--86,000 more than at the end of last year--and doubles the number of new supportive housing units.

But while we're proud of our support for affordable rental housing--and public housing in particular--it's no secret that public housing has been in the news recently -- and not always for the right reasons.

But just as important as the allegations we've read about is how we respond. In Philadelphia, for example, once HUD learned of allegations of impropriety at the housing authority, we took swift action to restore credibility and protect tenants.

Let me be very clear: we have zero tolerance for fraud, waste and abuse.

Taxpayer dollars that go to public housing authorities should be used for one thing and one thing alone:

To ensure families are getting the quality housing and services they need and deserve.

Now, to those who would use this as an opportunity to attack public housing itself, I say:

Think again.

We aren't going to let anyone use a handful of examples--as appalling as they may be--to roll back public housing so many vulnerable families depend on.

Not on our watch. And not in the wake of a housing crisis.

Let's not forget that President Obama got his first job out of school community organizing on the South Side of Chicago -- in public housing.

No other President in our history better understands what a precious resource public housing is to communities, to our country, and to our future.

He's going to protect it -- and so am I.

Indeed, HUD's budget proposal makes crystal clear that winning the future requires us to harness the talent and abilities of all Americans of every race and ethnic background.

In it, we're protecting vulnerable families hit hard by this recession.

We're proposing a historic level of funding to enforce our fair housing laws.

And we're fighting to preserve our nation's rental homes to address neighborhood segregation and isolation.

Because we can't win the future if we are leaving a whole generation of kids behind in our poorest neighborhoods.

It's time we realized that -- and with this budget we will.

Winning the Future By Preserving Access to Homeownership

As his commitment to public housing reminds us, President Obama believes that we must continue to take the necessary steps to ensure that Americans have access to quality housing they can afford -- whether it's rental housing or homeownership, which has been an important source of wealth-building for minorities in particular.

We see that at HUD's Federal Housing Administration every day. Sixty percent of African American and Latino homebuyers purchase homes with FHA insurance.

But the impact this crisis has had on homeowners and communities alike is why we need to ensure that Americans have access to sustainable homeownership, founded on safe mortgages and quality, affordable rental housing.

That's why this Administration put in place the strongest consumer protections in history through the Dodd-Frank Wall Street Reform Act.

And it's why we are working with civil rights groups to build a housing finance system that promotes access and affordability.

That includes continuing to strengthen and reform FHA so that it remains financially healthy for the long term and is able to continue its mission to provide access for underserved borrowers.

It includes an Affordable Housing Trust Fund that supports affordable homeownership and rental housing.

We can't let those who blame our housing crisis on its victims cut low and moderate income Americans out of finding the affordable housing they need.

For all of these debates, whether it's making capital is available to all communities or ensuring that people who are ready to become homeowners aren't shut out of the market, you will be at the table with us.

And you will be part of the conversation.

Winning the Future Starts at Home

Ultimately, all these efforts are about the same thing:

Ensuring that every American can play a meaningful part in winning the future -- whatever zip code they live in.

Whether it's stemming the tide of the foreclosure crisis, preserving affordable rental housing for our most vulnerable families, or building a new system that preserves access to affordable homeownership for American families, at HUD we don't just want to work for you -- we want to work with you.

That's why I look forward to partnering with Reverend Sharpton and the entire civil rights community to create a better, fairer, more sustainable economy and country that works for our families and our communities.

If my experience as HUD Secretary so far is any guide, Reverend Sharpton won't be shy about making his voice heard.

Like President Obama, I know he is not only committed to winning the future -- he knows where winning the future starts:

At home.

In our communities, our schools and our churches and places of worship.

The less the American people think of these issues as being about capital markets and mortgage-backed securities--and the more they think about them as essential to the futures of their families, their children and their communities--the better system we'll build, the stronger our country will be, and the more opportunity we'll be able to provide every American.

That is your goal. It's President Obama's goal and mine as well. And in the months to come, I look forward to realizing it together. God bless you all -- and thank you for this opportunity.

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