Housing & Lending
Shelter is a basic human need - and homeownership is a basic key to financial viability. Some of the civil rights issues we look at here are predatory lending, fair housing laws, and homelessness.
July 23, 2009 - Posted by The Leadership Conference
LCCR and other civil rights organizations have long argued that the modern system of mortgage lending is profoundly flawed, and keeps many people from sustainable homeownership.
Despite the gains made in civil rights and fair housing during the last several decades, many members of racial and ethnic minority communities still struggle to obtain fair and sustainable mortgages, with federal regulators doing little to prevent the predatory lending practices that heavily contributed to the nation's economic downturn.
Recently, LCCR's Nancy Zirkin testified before the House Financial Services Committee in support of legislation that will create a new agency responsible for the enforcement of most financial consumer protection laws.
July 15, 2009 - Posted by The Leadership Conference
The number of homeless families who spend some time in a shelter increased by 9 percent from 2007 to 2008, according to the U.S. Department of Housing and Urban Development's (HUD) annual report on homelessness. The report, released last week, also showed significant increases in homelessness in suburban and rural areas.
The overall number of homeless people that spend some time in a shelter has changed very little since 2007, but the report identified important differences among homeless families and individuals. Families living in shelters are most likely to be headed by a single woman under the age of 30, whereas individuals in shelters are most likely to be disabled men between the ages of 31 and 50. Whites are also more likely to experience homelessness individually, whereas minorities are more likely to enter homeless shelters accompanied by family members.
The report also found that 42 percent of homeless people at any given point in time are "unsheltered on the street or in other places not meant for human habitation."
The report reflects some of the toll that the housing crisis and the economic recession have taken on American families. However, because the report doesn't include data after September 2008 when the economic downturn worsened, the recession's impact on homelessness may be even greater than the report suggests. HUD began monitoring homelessness on a quarterly basis this year in order to further explore the effects of the financial crisis.
July 13, 2009 - Posted by The Leadership Conference
The Federal Emergency Management Agency (FEMA) is unprepared to house people in the event of a catastrophic disaster such as Hurricane Katrina, according to Richard Skinner, inspector general of the Department of Homeland Security (DHS), which oversees FEMA. The Office of the Inspector General is responsible for auditing and critiquing DHS.
When people are displaced after a disaster, they often lose not only their shelter, but their way of life: their income, all of their possessions, and their communities. Hurricane Katrina destroyed more than 300,000 homes and displaced about a million people, many of whom are still unable to return to their communities. Property damage alone was estimated at over $100 billion.
Affordable housing is the first and most critical step to disaster recovery. Once people have reliable housing, they can begin to rebuild their lives.
However, in a House Committee on Homeland Security hearing last week, Skinner stated that FEMA's high-cost temporary housing units, limited housing repair capacity, lack of clear goals and priorities for success, and lack of coordination with local and state authorities have crippled the agency's ability to respond to large-scale catastrophes.
Skinner said that in order for FEMA to be sufficiently prepared for a major catastrophe, the agency must find low-cost alternatives to using travel trailers for temporary housing, develop a plan for the quick restoration of affordable housing, and develop policies in collaboration with local and state authorities to clarify responsibilities for housing and relocating displaced people.
July 2, 2009 - Posted by The Leadership Conference
In its 5-4 decision in Cuomo v. Clearing House Assn., L.L.C. this week, the Supreme Court ruled that states, not just federal authorities, can enforce their own fair lending and consumer protection laws against national banks. Consumer advocates say the ruling will play a major role in how consumer protection and civil rights laws are enforced.
The case began in 2005 when the state of New York tried to investigate certain national banks it believed were charging minority borrowers higher interest rates than White borrowers.
National banks, who are already regulated by the federal government, argued that state scrutiny of their mortgage lending records would unleash a complicated patchwork of state regulations that would make it hard for them to meet the needs of their customers across all 50 states.
But Justice Antonin Scalia, writing for an unusual group of four other justices – Justices Stevens, Souter, Ginsburg, and Breyer – found that in instances where state and federal law do not explicitly conflict, states should be free to enforce their civil rights laws in court. Otherwise, said Scalia, "the bark remains, but the bite does not."
"This Supreme Court decision is a victory for taxpayers, who have suffered enormously as a result of abusive business practices in all types of lending. This decision will help to restore confidence in the financial services industry and the national economy," said Michael Calhoun, president of the Center for Responsible Lending.
June 9, 2009 - Posted by The Leadership Conference
A new report by the National Community Reinvestment Coalition (NCRC) in partnership with the National Council of Negro Women (NCNW) shows that minority women are more likely to receive high-cost home mortgage loans than White women.
In many cases, disparities by race widened as income levels increased. The report finds middle- and upper-income African-American women to be a least twice as likely to receive high-cost loans as middle- and upper-income White women in more that 84 percent of the metropolitan areas examined. Similarly, middle- and upper-income Hispanic women were at least twice as likely to receive high-cost loans as middle- and upper-income White women in 62 percent of the metropolitan areas studied.
The study suggests that minorities, especially African-American women, are likely to be affected by foreclosures. NCRC and NCNW recommend that Congress strengthen the Community Reinvestment Act of 1977, to encourage more prime or market-rate lending to working families and communities.
June 9, 2009 - Posted by The Leadership Conference
Yesterday, the Department of Housing and Urban Development and the National Fair Housing Alliance launched a national media campaign that will inform Americans about how to avoid foreclosure and predatory, high-risk loans (PDF), and how to recognize when they might be experiencing housing or rental discrimination.
The campaign will target low-income and minority communities vulnerable to predatory lending and housing discrimination, including families on the brink of or in foreclosure, looking to refinance their homes, facing eviction, renting homes or apartments, or looking to buy a home for the first time.
June 5, 2009 - Posted by The Leadership Conference
Congress is considering passing a bill that will cap interest rates on consumer loans at 36 percent to prevent lenders from taking advantage of people who rely on these kinds of loans to meet basic needs or to cover unexpected expenses, like car repairs or vital medical procedures, many of whom are minorities and low-income people.
One of the most predatory consumer loans is the payday loan, a short-term loan with high annual interest averaging over 400 percent. Individuals on a limited income take out payday loans and often find that they can't pay back the loan because of the high interest. Often they fall into the debt trap of payday loans by taking out another loan because it is the only way to pay back the first loan, accruing heavy fines in the process.
Payday loan businesses tend to be located in predominantly African-American or Latino neighborhoods. Fifty-five percent of payday loans are taken out by African Americans and Latinos, who together pay over $240 million a year in fees.
A recent Center for Responsible Lending survey found that nearly three in four Americans support a federal cap on consumer loans at 36 percent.
Visit 400 Faces of Payday Lending, Center for Responsible Lending's website devoted to exposing the effects of payday lending on Americans, for more information.
June 3, 2009 - Posted by The Leadership Conference
The Obama administration said today that it will work with FEMA and the Department of Housing and Urban Development to find permanent housing for displaced victims of Hurricanes Katrina and Rita in the Gulf Coast who still live in hurricane relief trailers. The latest deadline extension for residents to move out of the trailers expired on May 30.
More than 80 percent of people living in the trailers own homes that were damaged by the storms but lack the economic means to finish fixing their properties. Most sought federal and state grants to pay for the repairs necessary to make their homes livable again, but frequent delays and administrative problems left many of them with no option but to stay in their trailers.
Under the administration's plan, $50 million will be distributed by Gulf Coast housing authorities in the form of new housing voucher rental assistance. Residents will get more hands-on assistance with transitioning to permanent housing and also have the option to buy their trailers from FEMA for as little as $1.
May 29, 2009 - Posted by Tyler Lewis
New Mortgage Bankers Association (MBA) data released yesterday shows that foreclosure rates and delinquency rates, or the rate of people who are at least one payment behind in their mortgages but not in foreclosure, increased in the first three months of 2009, even for homeowners with prime loans.
According to the MBA, there are more prime fixed-rate loans than other types of loans among new foreclosures for the first time since the rise in subprime lending. Generally, only borrowers with good credit qualify for prime loans.
The delinquency rate for homeowners with prime loans increased to a little more than 6 percent. In addition, the percentage of loans in the foreclosure process doubled in the last year. The combined percentage of delinquent loans and loans in foreclosure was about 12 percent, the highest ever recorded by the MBA.
Despite rising delinquency and foreclosure rates, the MBA lobbied aggressively to block an amendment to a foreclosure prevention bill in Congress that would have given bankruptcy judges the ability to rework defaulted home mortgages on family homes to an affordable value.
Without the amendment, the bill that was passed last week will not help as many homeowners as it could have. According to estimates by the Center for Responsible Lending and the National Association of Consumer Bankruptcy Attorneys, the change to bankruptcy law could have prevented up to 1.7 million mortgages from falling into foreclosure.
May 27, 2009 - Posted by The Leadership Conference
You may think that not owning a home will protect you from foreclosure - but an estimated 40 percent of households facing eviction due to foreclosure are renters, not homeowners. Many renters have been evicted from their homes with little or no notice - sometimes with no idea that a foreclosure was pending - after their landlords were unable to pay their mortgages.
But renters now have some protection against eviction under the foreclosure prevention bill signed by President Obama last week. The new law, which took effect immediately, requires the new owners of a property to allow tenants to remain in the home, as long as the tenants pay their rent on time. Renters will be able to stay until the end of their lease, or will get at least 90 days notice if they do not have a lease or if the new owner intends to reside in the home.
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