RTC Told African Americans Deserve Thrift Cleanup Action : Banking: Rep. Waters warns agency to act quickly to include minorities, urges easing of mortgage terms.
Rep. Maxine Waters, inundated with complaints about the Resolution Trust Corp.’s West Coast office, told officials of the federal agency Wednesday that they had better act quickly to include African Americans in the thrift cleanup business.
The Los Angeles Democrat also urged the RTC’s West Coast managers to broaden their efforts at modifying burdensome mortgage terms so that homeowners facing foreclosure can save their houses and resume paying off loans.
“I want to remove the obstacles between the RTC and the outside world,” Waters said in an interview during a daylong session at the agency’s Newport Beach office.
As a member of the House Banking Committee, she plans to take what she learned Wednesday to Washington to monitor the RTC’s efforts and recommend changes, especially ones to help homeowners.
About 20 business people from the congresswoman’s district, which encompasses most of South-Central Los Angeles, joined her in questioning RTC managers about how they go about their job of managing and selling properties from failed savings and loans.
RTC officials said they have been seeking out minority-owned companies in South-Central Los Angeles, but commercial real estate broker Will Hardy of Los Angeles said, “We just haven’t seen much of it.”
Hardy, who has been in the business for 23 years, said in an interview that he got the run-around when he tried to help a client who was late on mortgage payments to an S&L; that had failed. The RTC was operating the thrift, Hardy said, so he went to officials there.
“They said they didn’t have the power to restructure the loan, and they told me to go to the RTC office in Newport Beach,” he said. “The RTC there said they fired everybody at that thrift and put new people in, so I should go back there to straighten it out.”
Hardy said he was unable to get the RTC to respond, something he said has occurred frequently in the nearly four years the West Coast office has been open.
Others expressed similar frustrations about their efforts to acquire RTC properties, obtain work from the agency or help clients with problem loans under the agency’s control.
Under federal law, the RTC is supposed to use the private sector for most of its work, and woman- and minority-owned businesses are supposed to receive special consideration for handling the agency’s work.
But African Americans at the meeting say they have largely been shut out from obtaining RTC work. And they worry that little will come their way before the agency itself is scheduled to go out of business at the end of 1995.
“This is the last go-round,” Waters said. “If we don’t get in in a substantial way, then a significant portion of the business community will have lost out.”
Waters described her “biggest pet peeve” as the reluctance of lenders and the RTC to alter loan terms for borrowers who can’t make payments because of lost jobs, medical expenses or other temporary cash constraints.
Other business people at the meeting complained that the RTC, which began talking to black community leaders only in the past six months or so, hasn’t explained well enough how privately owned businesses can buy properties or obtain work from the agency.
They also questioned the Newport Beach office’s effort to reach into the black community.
It was only last year that the agency started advertising occasionally in the Los Angeles Sentinel, one of the nation’s largest black-owned newspapers. And it was only last fall when the RTC first met with the two major African American realtor groups in Los Angeles: the Southwest Board of Realtors and the Consolidated Realty Board of Southern California.
