By Briana Vannozzi
Its five years since the financial reform package known as Dodd-Frank became law, and the anniversary is no party.
“We constantly have efforts in congress to water down Dodd-Frank,” said Rep. Frank Pallone
The law was intended to provide stronger regulation of Wall Street and prevent a repeat of the 2008 economic collapse. However, projects still linger and attempts to curtail some of the policies are getting stronger. At a roundtable in Highland Park today, advocates said New Jersey is only just beginning to feel some of the positive effects.
“Rules that are helping make mortgages clearer to potential home buyers,” said Beverly Brown Ruggia of New Jersey Citizen Action.
Part of that is due to the CFPB, or Consumer Financial Protection Bureau put in place under Dodd-Frank to help prevent the very same mortgage lending practices that tanked the economy.
“We’re still hit hard by the economic crash where people are still falling behind in their mortgages, we’re still number two in the country. We go back and forth number one number two in the country for foreclosures,” said Ruggia.
New Jersey’s foreclosure rate falls around .17 percent or roughly 70 thousand homes as of the second quarter. That’s higher than the national average which hovers around .09 percent.
“The process for foreclosure in New Jersey takes 270 days. A lot of times I see banks backing off they’re poised to do a sheriff sale, poised to get the house and they’re like, ‘wait a minute I might not be able to resell that house right now’ or ‘it might not be worth what I thought,’ I’m not going to do it,” said consumer attorney Peggy Jurow.
These advocates want more funding for the CFPB, which has also helped to stop many payday lenders. The lenders typically target low-income and minority consumers, usually at sky-high interest rates.
“The vast majority of payday loans are taken out for reoccurring expenses, to pay the rent, to pay the mortgage car payments so those living expenses, not single arbitrary purchases,” said NJ NAACP Economic Development Chair Bruce Davis.
“Where folks who have basically seen an decline either in income or their credit scores, but still want to own or need to own a car as well as purchase a home. They’re so desperate to do so maybe they’ll take the loan that has less than stellar interest rates or terms for them to be able to have those things,” said Kimberly El-Sedek, Real estate development manager for La Casa de Don Pedro in Newark.
Pallone says he’ll lobby his colleagues for support.
“If you would have said to me in 2008 that I would still be doing this practice of law, still be working on mortgage modifications, I would not have believed it,” Jurrow said.
Implementing the regulations under Dodd-Frank has proven to be a long and uphill battle and advocates in congress are expected to face much of the same this fall as more packages of legislation are expected to be rolled out looking to change or roll back the law.