Jackson calls for quicker action on foreclosures

Banks that have received billions in federal funds from the Obama administration to work with troubled homeowners are moving at a “snail’s pace,’’ Jackson said in an interview at the Globe yesterday.

“If they’ve been bailed out, they must pass on the benefits,’’ Jackson said of lenders. He added, “right now, they’re dipping in the ocean with a cup.’’

Jackson, the 67-year-old civil rights leader and founder of the RainbowPUSH Coalition Inc., has been especially critical of predatory lending, which he said has led to higher foreclosure rates among black and Hispanic homeowners. However, he said that he advocates a banking plan that would help everyone facing foreclosure, not just people with subprime loans in default.

Jackson said under the current system, banks review and modify loans in foreclosure on a case-by-case basis, slowing the process to a crawl. Lenders should be offering homeowners more sweeping access to refinancing at a 5 to 6 percent interest rate, he said, noting that he met recently with banking executives in New York to discuss his ideas. He declined to identify the banks involved or discuss their response.

According to a report released this week by Warren Group, foreclosure proceedings in Massachusetts approached historic highs with lenders initiating more than 2,800 foreclosure proceedings last month. That was five times the 502 filed in July 2008. The foreclosure process on average takes a year from when it is initiated by a lender. In the interim, some owners are able to make additional payments or refinance their mortgages.

Jackson said joblessness and the recession mean that many aren’t able to recover, while many large banks like Wells Fargo “act as though they are wearing clean gloves.’’

Alanson Van Fleet, a spokesman for Wells Fargo, said the bank has extended more than $471 billion in credit to US consumers and businesses, 19 times more than the $25 billion it has received from the US government. However, he acknowledged challenges.

“In some instances we have not been able to serve all the customers as we would have liked to,’’ he said. “As the numbers of customers have increased, we’ve not been able to keep up with all the modifications. We know it’s a difficult time for our customers and we’re committed to immediately improving the service we provide.’’

The RainbowPUSH Coalition has participated in protests on Wall Street and has rallied at the federal Housing and Urban Development agency to demand a moratorium on home foreclosures and federal intervention to restructure loans.

Jackson said evidence of the fallout from the foreclosure crisis is everywhere, from the closure of small community banks to the increasing violence in many city neighborhoods where homeowners have left or been evicted. Housing prices have also fallen, he said, affecting tax collections.

“It’s midnight in our economy,’’ Jackson said. “Hope is being challenged by despair.’’

Megan Woolhouse can be reached at mwoolhouse@globe.com.