Hispanics Often Victims of Predatory Lending

WASHINGTON — Hispanic home buyers are often steered into mortgages with high interest rates even though they qualify for more affordable loans, a report released Wednesday found.

"Too many Latinos have been ignored by some lenders and shuffled into expensive loans by others, even when they have good credit," said Janis Bowdler, senior housing policy analyst with the National Council of La Raza (NCLR), a Hispanic civil rights organization that released the report with the National Association of Hispanic Real Estate Professionals.

The report examined lending practices in six cities with a high concentration of Hispanic home owners: Chicago, Miami, Los Angeles, San Jose, Dallas-Fort Worth and Houston.

It found that licensing and certification standards for mortgage brokers are not rigorous enough to protect against predatory lending.

The report also said that many Hispanic families have unique circumstances — such as multiple wage earners in one household and a lack of banking history — that unfairly disqualify them from getting certain mortgages.

As a result of these factors, "Hispanics are now shouldering a disproportionate burden in the default and foreclosure rates across the country," said Timothy Sandos, president of the National Association of Hispanic Real Estate Professionals.

The report recommends that mortgage brokers develop automated systems that take into account other factors to determine loan eligibility, including a record of timely rent payments and utility payments. And it recommends a public relations campaign that warns Hispanic communities of predatory lending practices.

The report also urges policy makers to create a national, centralized system to set minimum federal and state guidelines to be implemented at regulatory agencies.

Sandos said that his organization's 15,000 professional members are in favor of reforms.

"Our members very much want more enforcement ... so you can weed out the bad actors from the good actors," he said.

Hispanics' homeownership rates hit an all-time high of 50 percent this year, though that is still a quarter less than the rate of non-Hispanic whites, the report said.

On the Web:

National Council of La Raza: www.nclr.org

National Association of Real Estate Professionals: www.nahrep.org