For the 1 million Americans who filed for personal bankruptcy in 2008, more than 580,000 of them held mortgages. 2 weeks ago, Citigroup made a bold move to allow bankruptcy judges to modify their customer’s mortgages in bankruptcy court. This move flies in the face of conventional mortgage loan modification, but is a positive step towards mitigating foreclosure proceedings for honest hard-working homeowners. Given time and money, this move can allow hundreds of thousands of homeowners to remain in their homes, reducing poverty and homelessness.

Traditionally, homeowners have to seek loan modification outside of bankruptcy court before they file. It was pure luck whether or not a bank wanted to work with their customers. In the era of adjustable-rate mortgages, most banks did not care to work with their consumers and reclaimed homes as assets. As a result, many consumer rights advocates demanded legislation to protect the consumer and force banks to modify loans for honest customers trying to maintain their investment.

For many of these homeowners, foreclosure led to their bankruptcy as they struggled to pay rising mortgage costs and fees. In mid 2008, the HOPE for Homeowners program was a Congress-led initiative to bring relief to struggling homeowners. The HOPE program allowed homeowners to adjust the principal they owe and reduce their payments into a fixed rate conventional mortgage. The HOPE for Homeowners program lacked one important thing: it did not force lenders to modify loans. In fact, lenders had a choice if they even wanted to use the HOPE for Homeowners program and inform their customers if they qualified.

As a result, only 400 applications for HOPE have been used. The initial goal was 400,000 applications. Only 1% of lenders agreed to use the program and work with consumers to save their homes. The rest of the banks decided to take a risk and repossess the lost property. The mortgage crisis deepened, and the risk those banks bet on cost them dearly. So much that they vied for “bailout” funds to stay afloat.

Citigroup was one of the banks that adamantly fought against government intervention on home loan modification. On January 9, after receiving over $45 billion in bailout money, Citigroup changed its tune and agreed to allow judges to change home loans in bankruptcy court. Banking lobbyists claim the move will make home loans more expensive and risky for banks, since judges will usually side with the consumer and allow major modifications. Consumer groups are proud of the move, recognizing the government is finally forcing banks to work with their customers and prevent homelessness.

For more information, see: MSNBC

All across America, people are hurting. Most of all, people are hurting for jobs- even those already employed. Half a million Americans have lost their jobs this year, bringing unemployment up to over 7%. But how many Americans are “underemployed”?

In order to prevent poverty, people need jobs that provide a livable wage with basic medical benefits. Underemployed Americans are forced into working part time simply because there are no full time jobs available. Employees who are underemployed rarely receive benefits of full time employees. Sick employees are forced to buy medical insurance outside of their job, which further reduces their income. In fact, some companies purposely reduce employee hours below full time to avoid paying for their benefits!

One state that has made the news lately is California. For many Californians, times are the roughest they’ve been in 14 years. 1 in 5 unemployed adults in California have been unemployed for 27 weeks or longer. The overall unemployment rate is nearly 9%. These unemployed adults are forced to turn to public aid for help at a time when California faces one of the biggest budget shortfalls in history.

California is a perfect example of what could happen in 2010 if states across America don’t push for economic and financial reform. By the end of 2009, if the foreclosure rates continue, several million Americans will become homeless. Meanwhile banks and credit card companies continue poor consumer practices that are tearing the American dream apart at the seams.

Poverty prevention is a complex issue, but it begins with an individual’s ability to become self-reliant and maintain a standard of living. Without a chance, many Americans are simply giving up. It’s time to inspire action and demand for consumer and employee protection.

For more information, see A Time for Growing Need

Many people see a homeless person on the streets, and they think that such a situation could never happen to them. Recently, PBS chronicled vital statistics databases and homeless shelters all across the U.S. to determine the biggest causes of homelessness.

Lack of adequate health care is right at the top of the list. 1/3 of Americans have no health insurance, and most of these are low-income workers. The sicker they become, the more likely they are to be laid off. Without health care, they cannot get better. If they cannot get better, they cannot work. As a result, they end up homeless and the vicious cycle continues.

Domestic violence is another major factor of homelessness, especially in women. This goes hand in hand with mental illness, which can spur domestic violence and victim abuse. Since many hospitals were closed in the 1980s to de-institutionalize the mental health industry, patients have become homeless.

Finally, substance abuse is another major cause of homelessness. Even Hollywood actors have fallen into homelessness when they fall to addiction. No one is immune to harmful substances, no matter how much money or fame they have.

For a long time there was great debate over how to accurately describe homelessness and its pervasiveness into American culture. There are two well recognized ways to describe homeless numbers:

• Point in time: measuring the number of homeless people at any one given time. A “snapshot” of homeless numbers. “Critics say this method is likely to overestimate the number of chronically homeless and underestimate the number of people who experience temporary homelessness.”

• Period prevalence: recording homeless numbers over a set period of time. “Critics of this method point to the difficulty of standardizing measurements. Other affecting factors in measuring homeless rates include the duration of counting and time of year of counting.”

HUD has adopted a modified point-in-time method that measures homeless numbers in shelters and homeless numbers on the streets. After a thorough examination of numbers in 2005, HUD came up with a baseline of over 744,000 homeless people at any given time. This baseline number helps establish a measurement for future homelessness. Today, in 2009, we can look at the numbers and determine whether or not we have more homeless people or less than 2005.

For more information see HUD and PBS