NCRC Commends Bank of America on Launching Principal Reduction Program

Washington, DC — In reaction to the news that Bank of America would launch a principal reduction program, John Taylor, president and CEO of the National Community Reinvestment Coalition, today made this statement:

“Bank of America is to be commended for launching a program to reduce principal balances on loans that are underwater. Principal reduction is an important tool in making loans sustainable for many borrowers. The rest of the industry should follow suit. And federal policy should reflect the growing consensus that principal reductions are required to stem the foreclosure crisis, not more half measures that push the problem down the road. For example, while the Home Affordable Modification Program (HAMP) allows for principal reductions, the program has been hamstrung by its lack of an explicit requirement that lenders and servicers do so. Lenders and servicers must be compelled to take more aggressive actions to prevent foreclosure. And the federal government should take action to exercise its authority to mandate such reductions on loans held by Fannie Mae and Freddie Mac.”

John Taylor will testify before the House Oversight and Government Reform committee on the HAMP and Home Affordable Refinance Program (HARP) tomorrow.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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