(NNPA) - On April 29, the Senate Sub - committee on Fi nan cial Services and General Govern ment Com mittee met to address the shor tfalls of current federal programs intended to stem still-unfolding foreclosures. The session led by subcommittee chair, Illinois’ Sen. Richard Durbin, and ranking member, Sen. Susan Collins of Maine, included candid testimony by Treasury Secretary Timothy Geithner. After acknowledging how the housing crisis continues to affect millions of Americans, Secretary Geithner recounted the resources dedicated to a series of federal response programs before shifting the focus from government action to the private sector’s inaction.

“I want to be clear”, said Geithner, “that we do not believe servicers are doing enough to help homeowners – not doing enough to help them navigate the difficult and often frightening process of avoiding foreclosure.”

Geithner continued, “We are troubled by reports that servicers have foreclosed on potentially eligible homeowners ... That they have lost documentation, or claimed to. That they are not responding to the needs of responsible and increasingly desperate homeowners.”

New research from the National Community Reinvestment Coalition (NCRC), also released this week substantiates Geithner’s claims. The report entitled Foreclosure in the Nation’s Capital examined loans in the Washington, DC Metropolitan Statistical Area (MSA) that includes the District of Columbia, five Maryland counties, another 10 counties in Virginia and two in West Virginia.

According to NCRC, this specific geographical area was chosen because it reflected the procession of foreclosures in other locales and additionally builds on earlier findings by numerous other organizations, including the Federal Reserve.

Citing the U.S. Congress Joint Economic Committee finding that $2.7 trillion of housing wealth was lost from 2007-2009, NCRC’s study confirmed many of the same conclusions earlier reached by the Center for Responsible Lending: there are verifiable lending disparities, disproportionate impacts, and no objective criteria to explain these differences.

For example, NCRC found that in the metro DC area, lending patterns revealed that 70 percent of Latinos and 80 percent of African- Americans were more likely to receive a subprime loan. Secondly, African-American mortgage loans went to foreclosure more often than those held by Whites.

As early as 2006, CRL’s own research determined that minorities were significantly more likely than whites to receive a high-cost, subprime loan even when credit scores were the same for both home purchase loans and refinance loans. Much of the disparity in lending was related to higher interest rates, pre-payment penalties and yield spread premiums - a fee lenders paid to mortgage brokers for selling high-cost loans.

Most importantly, CRL warned in this report that “We believe that evidence of disparate pricing for borrowers of color is likely a symptom of a larger set of issues in a market that has gained notoriety as a magnet for predatory lenders.”

The irony is that all of these lending disparities occurred when federal laws have already been enacted to assure fair housing, fair lending, community reinvestment and more. So the logical question becomes, “What happened to enforcement?”

The unfortunate answer is that all too often, regulators relegated consumer concerns to those of private enterprise. In that process, all consumers, but especially consumers of color were hurt financially while lenders made record profits and bonuses.

Consumer financial reform should address these ills – not just for communities of color – but for everyone.

Charlene Crowell is the Center for Responsible Lending’s Communications Manager for State Policy and Outreach. She can be reached at: Charle ne.crowell@responsiblelending.org

Foreclosures and Scams:
Don’t Let it Happen to You

(NNPA) - Like a relentless tide, foreclosures are pressing people into corners; closing in and eroding their ability to keep their homes.

This is the reality confronting millions of Ame rican homeowners – many of them over 50 and many of them people of color. Sadly, the dream and investment of a lifetime – home ownership – is slipping away as job loss, the cost of getting sick, high interest rates and battered retirement funds challenge consumers’ ability to keep up with their mortgage payments.

Nationally, African-Americans represent just 9 percent of all homeowners. But according to NeighborWorks America, a non-profit organization that creates opportunities for people to achieve home ownership and administers the National Foreclosure Mitigation Counseling Program (NFMC), foreclosures are disproportionately affecting African American homeowners, who often have higher interest rates.

Since African-Americans are also disproportionately represented among the nation’s unemployed, the foreclosure crisis is even more distressing for Blacks struggling to keep their homes.

Federal programs like Hope Now and the Obama Administration’s Making Home Affordable plan have been created in response to the subprime lending crisis and continuing economic uncertainty. The programs bring together government, lenders, consumer counselors, borrowers and investors to negotiate mortgage modifi cations, repayment plans and reduced monthly payments, which keep foreclosure at bay for some homeowners. Unfortunately, many homeowners still find themselves in default even after adjustments are made.

NeighborWorks America also works with Hope Now to reach even more troubled homeowners. Together with communitybased affiliates and partners, they counsel and educate high-risk clients on getting foreclosure prevention assistance and on avoiding ruthless con artists who take advantage of troubled homeowners.

Sadly, in the middle of financial turmoil, homeowners must also be aware of fraudulent lenders peddling loan modification scams. These con artists present themselves as reputable lenders or counselors who promise to help people save their homes. But they actually prey on unsuspecting homeowners, manipulating circumstances so they can take possession of people’s homes.

Vulnerable homeowners who face foreclosure and are desperate to keep their properties or to sell them quickly, are prime targets for these mortgage swindlers.

We’re living through challenging times. If you’re at risk of losing your home – even if foreclosure proceedings are already in progress – you can still get help. Start by calling the Homeowners HOPE hotline,1- 888-995-HOPE, a national hotline linked to NeighborWorks America, HUD, Hope Now and the Making Homes Affordable program.

Also, practice the following safety tips to help protect yourself, your family and your home:

• walk away from housing ‘counselors’ who ask for fees in exchange for counseling services – all Housing and Urban Development (HUD) approved counselors provide assistance for free;

• don’t let anyone pressure you or rush you into signing papers – walk away;

• never sign or transfer the deed to your home to anyone who claims they can ‘save’ your home if you do;

• only make mortgage payments to your mortgage company.

You don’t have to be a victim. Keep your home safe and keep it yours.

Dr. Joyce Payine is AARP Foundation board chair and on the AARP board of directors.

BBB Warns of Insurance Scams

In the midst of a tight economy and in the wake of the new national healthcare reform bill, State and Federal regulators are warning about a surge in healthcare-related scams.

Better Business Bureau advises consumers to do their research before signing up for insurance coverage because their personal and financial health is on the line.

According to an October 2009 survey conducted by the Coalition Against Insurance Fraud, 57 percent of state fraud bureaus reported a higher incidence of health insurance fraud in 2009 compared to the previous year. The increase was largely attributed to “unauthorized entities selling fake coverage” and “the rise of medical discount plans.”

“Navigating the healthcare system can be a tricky maze and coordinating your physicians, prescriptions and insurance coverage isn’t always easy,” said Alison Southwick, BBB spokesperson. “One of the first steps to finding healthcare services that are a good personal fit, is to start with a provider you can trust.”

Additionally, the new healthcare reform bill quickly sparked new scams; shortly after it was signed into law, the US Department of Health and Human Services issued a warning to consumers to beware of health insurance offers claiming to be part of new federal regulations. For example in Missouri, the state Insurance Director warned that a door-to-door salesman was claiming to be a federal agent selling insurance under the new law. BBB recommends taking the following steps when shopping for health insurance coverage to avoid getting ripped off:

Research the company with BBB. Always check out the insurer’s BBB Reliability Report online at bbb.org. Reliability reports are available for free and will tell you how many complaints the business has received, whether there has been any government actions brought against the business, as well as BBB’s overall rating.

Confirm the company is licensed with the state insurance commissioner. Each state has a department devoted to regulating insurance companies. Make sure the insurer is licensed to operate in your state.

Read the fine print carefully. Make sure all verbal commitments are in the fine print. Don’t just take the company’s word for it. Also confirm with your pharmacist and doctor that they accept the plan you’re considering.