From the NY Times Editorial Board:
The mortgage crisis that has placed millions of Americans at risk of losing their homes has been especially devastating for black and Hispanic borrowers and their families. It seems clear at this point that minorities were more likely than whites to be steered into risky, high-priced loans — even when researchers controlled for such crucial factors as income, loan size and location.
What’s new right? Well what can we do about it?
The Congress that takes office in January can start to deal with this problem by strengthening fair-lending laws, especially the Community Reinvestment Act, which encourages fair, sound lending practices while requiring banks to lend, invest and open branches in low- and moderate-income areas.
Yes.
Lawmakers should also extend that law to cover the often fly-by-night mortgage-lending companies that helped drive the subprime crisis. Those companies saddled entire neighborhoods with risky, high-priced loans that borrowers could never hope to pay back, sold those loans to Wall Street and then went out of business.
Congress needs to keep in mind that many of those players are surely to be back in operation somewhere down the line. Some already have returned in the guise of offering to help homeowners avoid foreclosure.
Yes. As an aside, f you are in foreclosure, unless you are in the most rural of locations, there is no reason that you should pay one of these foreclosure assistance groups to negotiate a loan modifciation. These services are available for free by way of city and state funded housing counselors in almost every major city. Most of these mortgage consultants will just take your money and then not do anything. And, in any event, not-for-profits, sometimes funded by your tax dollars, will help you for free.
Think about it. When is the last time you accepted a service by paying thousands of dollars, before you got anything? Most of these foreclosure rescuse places that charge ask for money up-front. Ask yourself, why that’s a good deal. Just a tad of advice for people struggling with their mortgage.
In other sobering news:
55 percent of loans to African-Americans, 40 percent of loans to Hispanics and 35 percent of loans to American Indians fell into the high-cost category, as opposed to about 23 percent for whites. There also were troubling gender differences. Women got less-favorable terms than men.
