NAACP presses lending-bias lawsuitRights organization holds ‘Day of Action' in preparation for court hearing next month By Yvonne Wenger (Contact)
The Post and Courier
Thursday, July 3, 2008
COLUMBIA — Calling on data that shows black borrowers have been given higher mortgage rates than whites with the same qualifications, the South Carolina State Conference of the NAACP prepares to have its day in court. A hearing is set for next month on a federal lawsuit filed by the National Association for the Advancement of Colored People on behalf of borrowers in South Carolina and across the country. "We urge anyone who feels like they have been discriminated against to call," said Dwight James, executive director of the state NAACP. His comments came Wednesday in an event held in Columbia and cities across the country. For helpIf you believe you've been a victim of discriminatory lending practices, call the NAACP hotline at 410-580-5777. Help is also available through the S.C. Department of Consumer Affairs, 800-922-1594, and the Homeownership Resource Center, a division of Family Service Inc., 800-232-6489. The purpose of the national "Day of Action" was to demand an end to what the organization perceives as discriminatory lending practices. The lawsuit names 17 of the country's major lenders as defendants, including JPMorgan Chase & Co. "We believe we price our mortgages fairly with prices based on a borrower's financial qualifications," said Tom Kelly, a JPMorgan spokesman. The NAACP is using data collected under the Home Mortgage Disclosure Act between 2004 and 2006 to support its claims. According to that information, blacks are estimated to be between 31 percent and 34 percent more likely to be put in a higher cost mortgage than similar white borrowers. The issue is considered especially acute in the Charleston area, which was found to have the nation's highest difference between what minorities and whites pay for mortgage loans. That information was uncovered in a report released in July 2007 by the National Community Reinvestment Coalition, a Washington-based organization that seeks to equalize access to credit and banking services. The report was based on 2005 data collected by the U.S. Federal Reserve. Skeptics argue that such studies have flaws because of the difficult nature of making true side-by-side comparisons. Kelly noted that when JPMorgan sets mortgage rates, income, credit history, payment schedules, debts and assets are all weighed. Still, Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, is convinced the discrepancy in lending practices is no coincidence. "We shouldn't blame borrowers because (they're) so unsophisticated that (they're) being taken advantage of — this was a deliberate act," she said. She cited statistics gathered by the Center for Responsible Lending that say blacks and Latinos get subprime loans at a rate of 52 and 40 percent, respectively. The rate for whites is 19 percent. Nearly one in six subprime loans will result in a home foreclosure, she said. In Charleston County, 901 homes were foreclosed in 2005 and 2006. "We're looking at dramatic numbers," Berkowitz said. The lawsuit was filed in July 2007 in U.S. District Court in Los Angeles. In August, a judge will consider motions filed by both sides. A trial date is likely to be set at that time. Reach Yvonne Wengerat 803-799-9051 or ywenger@postandcourier.com. |
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Comments
This article has 17 comment(s)
Posted by The_Mouth_of_the_South on July 3, 2008 at 12:24 p.m. (Suggest removal)
Did it ever occur to these people that the reason that blacks were charged a higher rate is because their credit scores were lower and they were truly higher risk borrowers?
Posted by chris50 on July 3, 2008 at 12:26 p.m. (Suggest removal)
it's everyone's fault, except the black community. please. this is the most ridiculous accusation. my mortgage company has no idea what color i am, how could they discriminate against me? the only thing mortgage companies discriminate against are credit scores.
if you believe any different, you are deluding yourself.
Posted by bkeelin on July 3, 2008 at 12:33 p.m. (Suggest removal)
Notice it was filed in California where the 9th circuit court of appeals will have a say in it. The most liberal and asinine judges on the bench will be weighing in on this. Why didn't they file it in SC where the bulk of the case centered? They are cherry picking their federal judges because they know it won't fly in any other district.
Their national headquarters are in Baltimore, MD but they want to go to the opposite coast to file this lawsuit. Sad thing is, they will probably manage to extort money from these banks just so the NAACP will go away.
Posted by Tammie on July 3, 2008 at 12:54 p.m. (Suggest removal)
NAACP and lawsuits..who'da thunk it?
Only the consumer has power over what they get charged, the credit score determines that. I'm glad they don't speak for me, they get on my nerves at times.
Posted by eyfigueroa on July 3, 2008 at 1:01 p.m. (Suggest removal)
The sad thing about this is that there were disreputable banks, lenders and mortgage brokers that used unethical and on occasion unlawful practices when writing up mortgages. That is why several states have begun class action lawsuits against companies for unfair practices.
This goes way beyond Blacks. Hispanics, the elderly, single parents and White lower middle class (whose only crime was to try to better themselves) were also targeted.
Granted, as an adult, a person should be held ultimately responsible for educating themselves about the home buying process. Yes, if someone signs a contract they should be held to it.
However, that neither negates nor excuses the wrongdoing of 'financial professionals' who did whatever they could to push these loans through.
The only problem I have with this issue is, whenever the NAACP gets involved, the waters become muddied by race baiting.
The NAACP will only cloud the issues and force those who may agree deliberately fight against it solely because of their hatred for the organization.
The NAACP has far more important issues it should address than this. Like how it turns a blind eye to what it going on in the Black community just so they can bring attention to themselves by attacking Whites.
Posted by RW on July 3, 2008 at 1:13 p.m. (Suggest removal)
When you fail to honor contractual obligations...Call the ACLU. No doubt some bigoted mortgage lenders set people up for failure! They probably had Bibles on their desks as well!
Posted by pygmon on July 3, 2008 at 1:22 p.m. (Suggest removal)
If they "push" these loans through...they're criminals. If they "deny" these loans to minorities based on sound financial principals applied w/o bias...they're racists. Pick your poison. Either way, banker man...you're screwed.
Posted by nospinelib on July 3, 2008 at 2:21 p.m. (Suggest removal)
I bet if people applied for loans before noon they might get a better rate and not feel so Pushed into these "racist and unjust loans."
Posted by Lovely_One on July 3, 2008 at 2:57 p.m. (Suggest removal)
Well said eyfig. It's just like those companies that admitted to hiring an uneducated white man with a criminal background before they would hire a black man with a 4 year college degree and no record. They make it bad for any company that would pass over a black applicant simply because the white applicant was better qualified. If we didn't have those people out there that do unscrupulous business then we wouldn't have to go through this. And like you said, the NAACP just takes away any validity these claims may have with the people by being involved. They are causing more harm than good.
Posted by bkeelin on July 3, 2008 at 3:59 p.m. (Suggest removal)
RW,
What's with the Bible comment?
As if the world had a higher moral standard than Christians.
Posted by RW on July 3, 2008 at 4:07 p.m. (Suggest removal)
bkeelin,
Yes...the left, ACLU etc despise believers but they do not have the gonads to actually say it! They also hate capitalism! They love.."Cuba" and Fidel Castro!! If they had their way there would be no mortgages...The Govt would own everything!
Posted by Larz13 on July 3, 2008 at 4:36 p.m. (Suggest removal)
They will probably get that bonehead psychologist who thinks he is a statistician who works for the Citidel to do the analysis. This is the same person who did the analysis for the P&C suspension study.
He'll say its discrimination and some savvy lawyer will call and expert witness statistician who will refute all of the discrimination claims.....CASE DISMISSED.
Posted by The_Mouth_of_the_South on July 3, 2008 at 6:35 p.m. (Suggest removal)
Maybe the NAACP can get Al Parrish to look into this!
Posted by RW on July 3, 2008 at 7:32 p.m. (Suggest removal)
Why doesnt the NAACP just send AL Sharpton, Jesse Jackson and Louis Farrakhan over to reducate the mortgage industry. Or better yet start demanding reparations!
Posted by ForPnC on July 4, 2008 at 10:30 a.m. (Suggest removal)
This is one of those joke lawsuits right?
Reminds me of the stupid woman who spilled hot coffee on herself then sued McDonald's for giving her hot coffee! The problem was she won. I guess she wasn't so stupid after all, eh?
The naacp is a joke. A bunch of loudmouths that aren't even worth a grain of salt.
Posted by NChuckian on July 4, 2008 at 11:20 a.m. (Suggest removal)
This is no mystery. To get a low rate you have to have a good score and shop around. Good rates don't just fall from the sky on a golden platter.
I'm sick of my hard work and success being blamed on the color of my skin.
Posted by AndyT on July 5, 2008 at 4:24 p.m. (Suggest removal)
This is another prime example of the racist NAACP accomplishing absolutely nothing. Instead of helping the community, they see dollar signs. They complain about the number of black males in prison. Why are there so many blacks in prison? Are the police just picking on the black man? I think that the banks are just issuing loans out based on race! I would have to agree that this is about as ridiculous as the McDonalds Coffee incident. Why don't they figure out how to clean up the community and get the crack heads off of the street. I am sorry but seeing ten to fifteen black males walking up and down the same street for hours on end at three in the morning. That should say something. I am sure they are not looking for charities to help! The KKK, Rainbow Push, and NAACP are all the same. RACIST!! They should do a study to see the numbers of reverse discrimination. I am sure that would be some alarming numbers.