Kai Wright’s moving Nation cover story from last week’s issue of the magazine put a human face on the subprime mortgage foreclosure crisis and illuminated a little remarked upon aspect of the catastrophe — the way that the mortgage industry has effectively stolen much of black America’s hard-won wealth. (The total loss of wealth for people of color due to the subprime crisis could reach $213 billion, including $92 billion for African-Americans and $98 billion for Latinos.)
One of the most useful legislative responses has been proposed by Rep. Stephanie Jones and eighteen other co-sponsors of the Predatory Mortgage Lending Practices Reduction Act,who are calling for lending practices that contribute to the health of the economy rather than to its undermining.
The people drowning in unmanageable debt aren’t the only ones affected by this epidemic. Neighborhoods physically decay as houses are abandoned, property values plummet and blight spreads through entire communities.
H.R. 2061 would help stave off this trend by establishing firmer guidelines for determining eligibility of applicants for subprime loans, preventing high-risk candidates from getting locked into loans that they can’t realistically expect to pay off.
Moreover, the bill would require agents issuing these loans to obtain credentials holding them to universally recognized standards of accountability.
Finally, the statute would require complete disclosure of charges and fees included in loan packages so that borrowers can make informed decisions about what they’re able to afford without being exploited by hidden costs.
Click here to implore your elected reps to support the Predatory Mortgage Lending Practices Reduction Act and make it a legislative priority after they come back from recess.
This post is part of “Housing Crisis Investigation Week,” a project of The Media Consortium which will culminate with Live From Main Street Miami- a televised town hall exploring how the city of Miami is facing the economic crisis and working toward a sustainable future. For more information about Live From Main Street and Housing Crisis Investigation week, click here. The Nation is a member of The Media Consortium.
