December 6, 2010; Source: New York Times | The value of nonprofits is hardly their 501(c)(3) tax status. It is in what they do, their strategies for action and social change, their perseverance against the odds, and their willingness to take on entrenched powers in business and government to fight for people not getting a fair shake.
Exemplary on this score is a Cleveland-based organization called ESOP, which stands for Empowering and Strengthening Ohio’s People. Originally called the East Side Organizing Project, the group fights to protect homeowners in Slavic Village and other inner city Cleveland neighborhoods.
Back in the early 1990s when ESOP came into being, it fought redlining, trying to get banks to live up to their Community Reinvestment Act obligations. Over time, as predatory lending burgeoned, ESOP joined that battle locally and statewide, and when the subprime mortgage foreclosure crisis hit, ESOP was active providing counseling for homeowners in Cleveland and eventually in other Ohio cities.
Here is where it gets really interesting. ESOP reports that 70 percent of its clients who completed its counseling process received loan modifications, a much higher proportion than most other counseling agencies around the nation.
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What makes ESOP so successful? Prior to the federal government understanding the necessary mechanics of foreclosure counseling, ESOP through solid organizing, got lenders and servicers such as Bank of America, Citi, Ocwen, and Litton to sign “fair lending agreements” which included designating someone in each organization who would be a single point of contact with the decision-making authority for cases ESOP brought to them.
For evidence of ESOP’s impact, look at the state of Ohio’s foreclosure prevention program’s numbers: The response rates for loan modifications sent to Chase, U.S. Bank, and Wells Fargo in 2009 were all less than 2 percent, however Countrywide’s (since absorbed by Bank of America) was 72 percent and Ocwen Financial’s was 85 percent. Why were those two so high? Both signed fair lending agreements with ESOP.
Combining technical capacity (ESOP knows its housing counseling stuff) and political power (through its community organizing), ESOP is a great example of the necessary blend of services, advocacy, and organizing.—Rick Cohen