Friday, March 13, 2009

Home Is Where The Heart Is, Or Where It Was

AP) — The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.

Class-action lawsuits will be filed against the banks Friday in federal court in Los Angeles, Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People, told The Associated Press.

Black homebuyers have been 3 1/2 times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said.

Both Wells Fargo & Co. and HSBC are receiving federal bailout funds. Messages left after hours with the banks were not immediately returned.

Amara Weaver of Milwaukee bought her first home in 1984, receiving a 6.25 percent fixed-rate mortgage. She says she had a steady job as a human resources director for a social services agency, never missed a mortgage payment and maintained excellent credit.

In 2004, she wanted to buy the house next door for her son to live in. She said the bank promised her a low fixed rate for a $40,000 loan, but at the closing, when reading the fine print, she noticed that the rate was actually 11 percent.

"I was blown away," said Weaver, an NAACP member. "I didn't have any choice (but to sign) ... it made me feel violated."

We've all heard the oft-repeated saws: A man's home is his castle. There's no place like home. And my favorite: Home is where the heart is.

Yet, it's hard to see your home as a home when in your heart you know that you have been ripped off by a refi scheme.

More than a decade ago I purchased a home with a mortgage interest rate "price tag" that seemed a bit exorbitant for the times. When I considered refinancing it after a few years of shouldering a mortgage interest in excess of 13%, my loan had been peddled around, and sold so many times that it seemed, almost yearly, I was being notified that I would have to make my payments to yet another mortgage banker.

This happened so many times, I actually forgot who it was that gave me the loan in the first place.

Even after going through reams of paperwork, documenting my net worth and all, I still ended up with a mortgage interest in excess of 8%. And I knew that my credit rating was exceptionally good, because I took great pride in paying my bills on time.

The rate was to be lower than 8%, but at document signing time, I learned that the interest rate would not be as advertised but would be considerably higher. Like the woman in the story above, I felt trapped, and signed because the new interest rate was still lower than what I was paying (around 13%), and I would harbor a resentment that lasted until I sold the house several years later.

Today, with the Internet, and Homebanking, I take a more active control over my finances, my credit score, and my credit worthiness.

At least three times a year I review my credit report for any irregularities, and participate in one of the nationally advertised identity theft insurance programs.

I signed up for the identity theft program because I do so much of my purchasing now online, and although I've installed software to minimize such theft, I still think it's prudent to pay a small fee annually to have that extra layer of consumer protection.

Now, I'm not surprised to learn that some lending institutions have been sticking it to blacks by charging them sub-prime interest rates when they qualify for lower rates.

Although redlining, where loans are actually not given because you live in certain areas, is illegal, I'm sure that it still exists to up the interest rates for those living in so-called "high-risk" areas, despite a person's credit worthiness or ability to pay back.

I would like to see the NAACP be more proactive in protecting black American consumers from predatory lending, as well as acts of redlining.

For years I haven't thought of the NAACP as a relevant organization at all. Where was the organization after Katrina?

Someone talk me down on this one!


GrannyStandingforTruth said...

I'd like to see NAACP get on their job period. They've been lagging for so long, until I almost said NAACP who?

Black Diaspora said...

LOL: Granny, you and me both!

GrannyStandingforTruth said...

Did you watch Keith Olbermann tonight? If you didn't, watch it. All of those names listed that AIG paid are in it together in the scamming of America. They need to be investigated. Wachovia, Citibank, Goldman Sach, Bank of America, and Merril Lynch. It's a scam. Paulson was connected to Goldman Sach. I hope they're being investigated.

Black Diaspora said...

Granny, I agree. They all should be investigated. This is tantamount to "double dipping."

Many, if not all the names on the list, have already received bail-out money, and now AIG is giving them more.

Their behavior is as fishy as the story regarding the lone survivor at sea. Have you heard the latest?

It appears that all didn't go as well as the media initially reported it.

I'm hearing that there was a fight, perhaps before the boat capsized.

Our initial position may be vindicated before it's all over with.

I don't think the truth will be suppressed in this instance.

Thanks for alerting me about Keith Olbermann's show. What Wall Street has done to this economy is appalling, and I hope heads roll before it's over with.

Too many lives have been ruined behind this greed, and the duplicitous behavior of banks, and perhaps certain government officials.

GrannyStandingforTruth said...

"It appears that all didn't go as well as the media initially reported it.
I'm hearing that there was a fight, perhaps before the boat capsized.
Our initial position may be vindicated before it's all over with."

Oh yea, when did you hear this? Was it in the news? I haven't been watching the news as much lately but in bits and spurt. I've been busy running errands and doing some other stuff. In addition, I felt in my spirit that it was time to take a break from the blog for a little bit.

I don't know what it is but for some reason I don't trust the Secretary of Treasury. It's something about him that bothers me and it hasn't came to me yet. I hope he is not one of the types that got where he is by passing off others ideas or work as his own. Nevertheless, I won't say that is what it is because to be honest right now I really don't know what it is that is nagging me about him.

Those people who don't want to see a black man in the White House are trying their best to come up with some to accuse President Obama of. A lot of it borders on insanity. I don't trust some of the Preachers he has been getting spiritual guidance from either. Some of them ain't right either. I pray that he discovers that most of the preachers who are fined tuned spiritually have very small churches, and are not trying to fleece the sheep in order to live lavish and luxurious lifestyles.

Black Diaspora said...

Granny, now that I've thought about it some more, I may have misheard some of the details.

It was a cable news story which stated that a fight broke out according to the lone survivor, but he might have said that one of the guys threw punches when hope began to wane.

Check out the news story here.

I feel the same way about the Treasury Secretary. There's talk that Obama may fire him.

I guess we'll just have to wait and see which way the wind blows.

He strikes me, too, as someone who can't be trusted.

It's best that our president surrounds himself with many voices.
He doesn't want to isolate himself and depend on the voices of just a few.

If he does, he'll lose touch with his own internal guidance system which is superior anything those pastors have to offer him.

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