FAIR HOUSING MEANS FAIR LENDING!

In 1968 Justice Stewart writing for a majority of the U.S. Supreme Court stated "IF CONGRESS WERE POWERLESS TO ASSURE THAT A DOLLAR IN THE HAND OF A BLACK MAN WILL PURCHASE THE SAME THING AS A DOLLAR IN THE HANDS OF A WHITE MAN ......THEN THE THIRTEENTH AMENDMENT [BANNING SLAVERY] MADE A PROMISE THE NATION CANNOT KEEP."
Jones v Alfred H. Mayer

Today that promise remains unfulfilled for many Americans because of the color of their skin, their race, ancestry, religion or mental or physical disability. The most important consumer purchase a person will make in their life time is buying a home. Under the Federal and California fair housing laws you have the right to be treated in an equal and impartial manner by a financial institution.

What is prohibited?

When applying for a loan, refinancing a mortgage or home equity loan no one can take the following actions for reasons of race, color, national origin, religion, sex, martial or family status or disability:
- deny a loan
- establish terms, conditions, or privileges different for the giving of a loan, for
example giving the loan only with a higher interest rate or downpayment
- charge different costs for services like making an application, doing an
appraisal, closing costs etc.
- be targeted for a loan that has fees, terms or rates that are excessively high
i.e predatory

What Should I look for?

If you experience one or more of the following you may have been discriminated against.
- Property Standards: Does the bank have standards for lending based on the maximum age or minimum property value?
- Minimum Loan Amounts: Does the bank have standards for lending based on a minimum loan amount?
- Subjective Lending Criteria: Does the bank have standards for lending based on the property being well maintained? Is the bank asking vague questions about the applicants character or insisting that the borrower have excellent credit?
- Different Terms for Loan: Does the bank have higher fees on smaller loans; require different downpayments or offer higher interest rates for loans in Hispanic or an African-American neighborhoods?
- Employment Stability: Does the bank have standards for lending based on the applicant being on the job for at least two years?
- Credit Record: Does the bank have standards for lending which excludes from the credit history regular payment of rent, utilities, doctors or the local grocer?
- Appraisal Practices: Does the bank have appraisers that make downward adjustments on the value of a home for "functional obsolescence" because it or the neighborhood is over a certain age?
- Private Mortgage Insurance: Does the bank have insurance companies that reject coverage based on some or all of the underwriting standards listed above?

The problem of predatory lending practices.

This is a problem that effects middle class families, as well as the working poor, but such practices are most especially targeted to lower income families and the elderly that don?t usually qualify for well regulated loans. Faced with a crisis like the purchase of a car, a major repair to their home, or a hospital bill, many people are forced to apply for a loan from a finance company or subprime lender.

Some of these lenders require the payment of high annual interest and points, pad closing costs, add recording fees, bogus broker fees and the like. The applicant must often buy credit life insurance, often for excessive amounts and roll all the premiums up-front to be financed as part of the loan.

The purpose of these terms is to make a lot of money. Also, it is to make sure that the person will not meet the terms of the loan. This forces the person into another round of refinancing so more fees and charges can be assessed until the home is foreclosed on and the borrower?s credit is completely ruined.

Find out your credit score.

The most important information to get a mortgage is your credit score. Score a 750 and your excellent credit history will likely make your dream home a reality. Rate a 525 or lower and your only hope will be a subprime lender or finance company. Until recently, this credit scoring system was a secret. However, now for a small fee, Fair, Issac & Company and Equifax Credit Information Services will provide you your score, information on how it was arrived at and things you can do to improve it. If you want to get your credit score go to their web site (www.myfico.com) or write Equifax Credit Information Services at P.O. Box 70241, Atlanta, Ga. 30324.

Where can you get help?

Often, the only way you can find out if your a victim of housing discrimination or predatory lending is to contact your local Fair Housing enforcement agency and request that they investigate a particular lender and their loan officers.

For people with a disability, the U.S. Department of Housing & Urban Development (HUD) also has made a telephone number free of charge for the hearing impaired (1-800-927-9275), also interpreters, tapes, Braille materials and assistance reading and completing the forms. HUD?s web site also has information about filing a complaint (www.hud.gov)