National civil rights groups are renewing their April 2007 call to institute an immediate national moratorium on foreclosures.

The groups, including the Leadership Conference on Civil and Human Rights, the National Fair Housing Alliance, National Council of La Raza, the NAACP and the Center for Responsible Lending say that until lenders in all 50 states demonstrate that they are adhering to all existing laws, regulations, and contractual guidelines related to loss mitigation and foreclosure legal process, they should not move forward with any foreclosures.

"If we don't take drastic measures now," says Wade Henderson, President & CEO of the Leadership Conference on Civil Rights, "we can expect millions of additional foreclosures in the coming years, with a disproportionate number of them involving Latino and African-American families."

Nationwide action

Lenders across the country are announcing temporary foreclosure moratoria and attorneys general are calling for the same because of systemic illegal foreclosure filings and misrepresentations.

Among the latest is Illinois Attorney General Lisa Madigan, who is demanding 23 additional loan servicers provide her office with information concerning the fairness and accuracy of their foreclosure procedures in courts across the state.

Madigan recently issued a similar demand to GMAC/Ally, Bank of America and JP Morgan Chase to halt all pending foreclosures in Illinois, including post-foreclosure sales and evictions, after they admitted they were filing false documents in foreclosure proceedings.

"The same mortgage giants and big banks that fraudulently put people into unfair loans are now fraudulently throwing people out of their homes," Madigan said. "They should not be above the law."

Madigan also announced she is helping convene a multistate task force of state attorneys general and bank regulators to coordinate states' reviews of servicers' foreclosure processes.

Uneven impact

Research demonstrates that just as minority communities were more likely to receive predatory subprime loans, they also suffer more from foreclosures. "Our research reveals that African-Americans and Latinos are almost 75 percent more likely to experience foreclosure than Whites, said Michael Calhoun, President of the Center for Responsible Lending.

"We cannot allow this injustice to continue," he added. "Mortgage servicers and lenders must work to preserve homeownership when possible; when not possible, they must follow the law when foreclosing." Moreover, the higher the concentration of racial minorities in a community, the higher the rates of foreclosure.

And it isn't just individual homeowners who are affected. Neighborhoods across America are being destroyed as each foreclosure has enormous spillover effects. Communities -- especially minority communities -- are seeing their home vacancy and crime rates increase while home values and tax bases are eroded.

Moratorim necessary

Because many lenders are not equipped to handle the current volume of home defaults, it's believed a foreclosure moratorium will give them a chance to develop adequate systems and capacity to preserve homeownership.

The groups are calling on Congress to investigate the widespread fraud and misrepresentation in foreclosure filings, and to revive legislation that would allow loan modifications in bankruptcy court proceedings.

The organizations say all lenders should be required to evaluate homeowners for loan modifications and other solutions, with strong transparency and accountability. Lenders who participate in the government's foreclosure prevention program (HAMP) or handle government-insured loans are already required to do so. Homeowners must also have recourse when their lenders deny loan modifications leading to unnecessary foreclosures.

Janet Murguía, President and CEO of the National Council of La Raza, says Latino and black families have been deeply harmed by the economic meltdown through the loss of homes, jobs, and entire neighborhoods.

"Our communities were targeted by predatory lenders As a result, more than 1.3 million Latino families will lose their homes to foreclosure by the end of the crisis. Foreclosure prevention programs are not working, foreclosure rescue scams are rampant in our communities, and now fraudulent documentation is leading to a new wave of foreclosures," she said. "Enough is enough."