U.S. must help those with bad mortgages

C. Nicole Mason

is the executive director of the Women of Color Policy Network in New York

President Obama is right to offer aid to homeowners.

When it comes to the foreclosure crisis, let's place the blame where it belongs - at the steps of banks and mortgage brokers that packaged risky products and pitched them to unsuspecting homebuyers eager to invest in the American Dream.

The introduction of Obama's $75 billion plan to aid homeowners at risk of foreclosures has sparked an outcry from some financial analysts, pundits, "responsible" homeowners, and others who argue that assisting homeowners at risk of default is unfair and rewards bad behavior. This attack assumes, however, that most of the homeowners now at risk of default were speculators, lied on their mortgage application, or leveraged debt to buy McMansions they could not afford.

But this is only a small slice of the foreclosure pie.

Many Americans bought their homes because they believed in the age-old value of homeownership and thought it would make a sound investment.

For many, the American Dream has turned into an American nightmare, with more than two million individuals falling victim to foreclosure, 10 million more having trouble making their payments, and - depending on how long the recession lasts - an estimated six million homes facing foreclosure by 2012.

Women and racial and ethnic minority communities were also hit disproportionately hard by predatory lending practices and subprime loans.

While consumers should shoulder some responsibility for failing to read the fine print, it is banks that chose profit rather than prudence, deregulation rather than oversight.

Now these institutions have received hundreds of billions of dollars to help revive the economy and stave off bankruptcy - an amount that dwarfs what the president is proposing to help owners avoid foreclosure and stay in their homes.

Obama's housing plan lays a good foundation. It will go a long way toward bolstering faith in the economy, stabilizing housing markets in vulnerable communities, and providing assistance to almost nine million families who fear losing their homes.

It is not a handout, but a hand up.