Organizing Update--New York City
Housing Here and Now! is a coalition of affordable housing groups, labor unions, AIDS activists, churches and community groups in New York City. They decided to get togther and force housing onto the 2005 NYC Mayoral Election agenda.
The group uses organizing tactics as well as political pressure. Their Fix It Now! campaign focuses on the city's worst slumlords. This article details how
tenants used a slumlord's mortgage company as leverage to get repairs made on a crappy building.
The group also has a web site
New York City's Worst Landlords so that tenants can report problems from all over the city.
Blacks Get More High Cost Loans--No Racism?
According to a
report released by the Federal Reserve, minority families often pay more for their home mortgages than white families.
As stated in an article in the
Washington Post: "Blacks and Hispanics are getting a disproportionate share of high-cost mortgages compared with whites, according to new federal figures released yesterday. The analysis of 2004 home-lending data shows that even after adjusting for factors such as income level, loan size and property location that could raise the interest rate offered on a mortgage, blacks are still nearly twice as likely as whites to be given a high-cost loan."
New regulations under the Home Mortgage Disclosure Act require banks to report on the cost of loans, as well as the race, income and outcome of the loan request. For years, community groups have suspected that minority families were steered into sub-prime loans, complete with higher interest rates, more fees and other costs.
The increase of sub-prime and predatory loans has devastated our communities, leading to a rash of foreclosures and vacant houses. How can these figures not point to racial steering? The data controls for income, location and loan amount. The only variable is race. Banks claim the variable is credit. This begs the question, blacks are twice as likely as whites (in all income groups) to have damaged credit?
The banks point to the fact that increased sub-prime lending expands mortgage availability to families with less than perfect credit. Activists point to studies like one completed in March for the
State of Pennsylvania Banking Department that links the increase in foreclosures to the increase in predatory loans.
HUD To Merge Officer and Teacher Next Door
from the September 8th edition of
the Housing Assistance Council's HAC News: Separate HUD notices make firefighters and emergency medical technicians eligible for the Officer Next Door sale program and propose regulations for combining OND and Teacher Next Door to create Good Neighbor Next Door. Comments are due Nov. 7. See Federal Register, 9/8/05, pp. 53487-88 and 53479-86, or http://www.hudclips.org.
Contact Joseph McCloskey, HUD, 202-708-1672.
Low-income communities like Syracuse have not been able to take advantage of this program, that gives teachers and cops a 50% discount on HUD Houses. Housing prices in our neighborhoods are very low, well-paid and unionized workers such as these can easily afford homes without such discounts. Their relatively high paying positions coupled with state laws exempting them from residency requirements, have created a mass exodus out to the suburbs.
The reform we need is to add teacher aides to the program. Teacher aides are definitely in need of financial assistance for home purchases, and more likely to want to live in our city neighborhoods.
Appraisal Abuse
According to a June 13, 2005 article in the Buffalo News, appraisers are feeling pressure to inflate home value estimates. This trend is going to disproportionately effect families in rust-belt cities like Syracuse and Buffalo:
"...observers are now worried about what may happen in places with lower prices and slower growth, such as Buffalo, or when the perceived housing bubble bursts and prices drop. They say people would find themselves with less equity than they thought, unable to repay a loan, and unable to afford a down payment on a new home. "If people began selling their homes and found they didn't have at least the value they had originally borrowed, there would be severe problems," said John Taylor, president and CEO of the National Community Reinvestment Coalition, a fair lending group."
Also--these out-of-whack appraisals are the key to property flipping--buying a house low and selling for an artificially high price to the unsuspecting and the credit-damaged.
"In places like Buffalo, where prices are unusually low, such appraisals also are used to "flip" properties in low-income areas. That's where participants buy homes cheaply and then quickly sell them for significantly inflated values, defrauding the eventual buyer and possibly leading to foreclosures that hurt communities by leaving homes vacant."
HOUSING COMES FIRST!
One thing that Republicans and Democrats agree on is the goal to increase the number of families that own their home. Both the Bush and Clinton Administrations have trumpeted their ability to increase the rate of homeownership to over 65% nationally. Special attention has been paid to minority homeowners--whose homeownership rates languish at under 50%.
How then do you explain
cases like these? Too many families are being raked over the coals by unscrupulous realtors, mortgage companies and appraisers. As we are increasing the rate of homeownership, we are also seeing a startling increase in foreclosures. Some critics, both left and right, are now pulling back from the warm and fuzzy notion of owning your home. It is being suggested that the newest homeowners aren't really ready, that we've moved too quickly.
BULLSHIT! We are letting professional larcenists fleece these families--often on the government's tab. Appraisers are largely unregulated. Fly-by-night mortgage companies and large "mainstream" financial institutions alike strangle new homeowner's dreams with predatory loans--high interest rates, hidden fees and other fraudulent terms. Supposedly "non-profit" agencies set up to rescue families from foreclosures end up stealing homes out from under unsuspecting clients.
Grassroots organizations know how to help families buy a home safely: home inspections, financial counseling, using the Community Reinvestment Act to bring prime rate loans to low-income neighborhoods. We want more homeowners and less fraud. Stop The Backlash!
