"The new data, along with the latest survey of housing counselors in California, confirm that things are tough for all families trying to avoid foreclosure, but it may be tougher for borrowers of color,” said Kevin Stein, CRC’s Associate Director and author of the report. “Federal and state regulators need to ensure that banks give all borrowers a fair chance to stay in their homes."

Racial disparities were evident in various dimensions of the HAMP data.
• “Incomplete modification requests” was the most frequent reason for trial modification cancellation, but borrowers of color had the highest share of cancellations for this reason. In Fresno, Latinos and African Americans had trials cancelled for this reason 47% and 44% of the time, compared to 37% of white borrowers.
• The issue of servicers losing documents several times persists. One housing counselor reported that a loan servicer rejected a modification application because it was in Spanish.
• In Los Angeles and Sacramento, African Americans disproportionately had their trial modifications cancelled for the reason “not accepted by borrower”. This seems unusual, and raises concerns that servicers are steering applicants to less favorable non-HAMP modifications.

As the state Attorneys General investigation and regulator investigations ensue, these persistent problems and inequities should be investigated and corrected in any settlement with loan servicers. The report includes a series of policy recommendations that would create real protections for homeowners seeking loan modifications.

The report was written by the California Reinvestment Coalition, with HAMP data analysis provided by Urban Strategies Council. For more information, contact Kristina Bedrossian at (415) 864-3980; This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

For more on this report visit the California Reinvestment Coalition's website here