"When [lenders] offer subprime loans to people who otherwise could have qualified for conventional or fixed-rate mortgages, that's discrimination," says Cy Richardson, vice president of housing and community development at the National Urban League.
Consider the numbers: Black homeowners have lost more than $92 billion to foreclosures since 2007, according to CRL. But that's just the beginning. Over the next several years, Blacks are projected to lose a total of $122 billion, while Latinos are expected to lose $98 billion.
Click here to read "The Housing Crisis: Blacks & Latinos Targeted."
Click here to read "Why a Lack of Diversity Killed Lehman Brothers & Bear Stearns."
Click here to read "Mortgage Brokers Pay Restitution for Discrimination."
The good news is that the Obama administration is identifying homeowners who are at risk and providing incentives to banks to modify mortgages, so payments are no more than 38 percent of their monthly gross income. What's more, borrowers who have a solid payment history may be able to refinance to lower-cost loans, with little to no equity. To find out if you qualify, visit www.financialstability.gov.
For those who don't qualify, what can you do to hang on to your home?
1. Contact Your Lender Now
When calling, tell the operator that you want to refinance or modify your loan so you're immediately routed to the appropriate counselor. Then, when you reach someone, ask if the counselor can outline all your options and clearly communicate your deadlines to avoid falling into default. If your mortgage payments are 60 days past due, you may be in default already.
2. Avoid Dodging Calls
Lenders reach out to homeowners to help resolve delinquencies. The reason: Working out a payment plan with the borrower is less costly to a lender than putting the home into foreclosure. So return calls immediately, even if you don't currently have the funds, to demonstrate that you're willing to reach an agreement and to avoid ruining your credit.
"In this market, in this landscape, there's absolutely no shame," says Dr. Maria Kong, president and CEO of the trade group National Association of Real Estate Brokers.
3. Contact a HUD-Approved Credit Counselor
If you don't feel comfortable communicating with your lender directly, HUD (Housing and Urban Development) counselors can help explain all your options, free of charge. Check out www.hud.gov to find a counselor near you.
"These people will help you talk to your servicers and hold your hand through the process," advises Kong, who has helped more than 1,000 customers in the Florida area learn about ways to save their homes by educating them about their options through workshops and informational sessions.
4. Seek Out Organizations
Groups such as the National Council of La Raza (www.nclr.com) can point Spanish-speaking homeowners to counselors who not only speak the language, but [who] also understand the cultural nuances that may keep English-only-speaking counselors from providing much-needed assistance. The National Urban League can also help homeowners finding culturally competent counselors.
5. Know Your Rights
If you understand what you're entitled to as a homeowner, you'll be in a better position to renegotiate home-loan payments. Plus, you'll be aware of the latest rash of foreclosure scams, including bogus loan refinancers.
Lenders such as Wells Fargo, No. 31 on The 2009 DiversityInc Top 50 Companies for Diversity® list, publish free guides for customers who may be facing foreclosure. Cosponsored with the National Urban League, Wells Fargo put out "The Foreclosure Workbook: The Complete Guide to Understanding Foreclosure and Saving Your Home," which is available at www.wellsfargo.com. The Hip-Hop Summit Action Network also offers a free "Get Your House Right" workbook, available in English and Spanish, at www.hsan.org.
For more information, visit:
National Urban League
http://www.nul.org/
HUD Housing Counseling
http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm
Freddie Mac
http://www.freddiemac.com/avoidforeclosure
