Anita Hill: Mortgage Plan a 'Quick Fix'

The attorney explains why Obama's plan and fair-lending settlements don't address the full problem.

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On Wednesday President Obama unveiled a housing plan to help more pinched homeowners, calling on Congress to make it easier to refinance for "responsible" people who are current on their mortgages. Since earlier refinancing efforts have fallen short of White House expectations, this updated version would allow eligible homeowners to refinance into loans guaranteed by the Federal Housing Administration, paid for with a fee on the nation's largest banks.

It was the latest in a string of actions related to the foreclosure crisis, including a $335 million Department of Justice settlement with Countrywide Financial Corp. for unfairly steering black and Latino families into subprime loans, and the creation of a special federal unit to further investigate abusive lending practices.

"Government must take responsibility for rules that are fair and fairly enforced," Obama said on Wednesday at a Virginia community center, where he announced the plan. "Banks and lenders must be held accountable for ending the practices that helped cause this crisis in the first place."

But for Anita Hill (yes, that Anita Hill), professor of social policy, law and women's studies at Brandeis University, the president's plan is simply inadequate. Having explored the crippling effect of the subprime crisis on African-American communities in her latest book, Reimagining Equality: Stories of Gender, Race and Finding Home, she told The Root why she thinks his remedies are merely a starting point, the more holistic solutions that the White House ought to be considering and why criminal prosecutions for corporate fraud must be put on the table.

The Root: Do you think that Obama's new housing plan, making it easier for "responsible" homeowners who are current on their mortgages to refinance, is an improvement on his previous efforts?

Anita Hill: I see it as an extension of one remedy, of opening up to more people who are in need. It's a good one. But this eliminates a lot of people who are behind on their mortgages. I reject the idea that those individuals are not responsible people. They are trying to live up to their obligations. A lot of people who are behind, for example, haven't just decided to walk away from mortgages.

So I agree that you do want to help those who have kept up with their payments and continue to struggle nevertheless. But that just doesn't get at the entire problem or the root of the problem. It certainly doesn't help the individuals who have lost their homes because of [predatory lending] from, roughly, 2006 to 2008. It also doesn't help the neighbors who are now living in communities that have been devastated since the foreclosure crisis.

TR: In terms of those neighbors, the other piece of Obama's plan takes a stab at improving communities by allowing Fannie Mae and Freddie Mac to sell foreclosed homes to investors who maintain them as rentals. By repurposing and filling vacant homes, wouldn't that help raise the value of neighborhoods?

AH: It's a good policy to get people in those homes as a start. I'm not sure if there's been enough analysis on how the mixture of rental versus resident-owned property will impact the neighborhood. Over time, hopefully businesses and services that have left will also come back. And even if we assume that eventually that will happen, we don't know how long that will take.

The problem is not simply that the homes are vacant. It's that they don't have in many of the communities access to the kind of public and private sectors that should make a neighborhood strong and desirable.