Scoop’s Views

I could care less what color someone is. I could care less what religion (or lack thereof) you wish to affiliate yourself with, just so long as you don’t try to push it on me. I could care less what your “special interests” are, whether sexual persuasion, immigrant rights, etc., at least I didn’t until people kept pushing their crap into my face.

The “National Society for Hispanic Professionals” (NSHP) has an article on its website that “national civil rights groups [on April 15, 2007] called for mortgage lenders … to institute an immediate six-month moratorium on sub-prime home foreclosures.”

How I see it, people went out, got loans, and now complain and whine because they can’t pay back those very loans. I don’t care if you’re white, black, red, yellow, green, purple, or orange: if you get credit, be sure you can pay for the full credit back, on-time, without worry. That’s why there are specific calculators, such as “mortgage calculators” available on many Websites, to help give you an idea if you really can afford to be a homeowner.

Finances are always a responsibility

Owning a home isn’t just about “buying” versus “renting” or “leasing.” No, it is about being more than a face in the area. It’s about being a member of a community. It’s about taking an active role in developing and growing an area, even one that’s well-established. If people didn’t contribute to their local communities, whether in a small town, such as Momence, Illinois or a major city, such as Harlem, located in New York City, the area will begin to die off.

Many areas, sadly, have seen this very thing happen over the past generation or two, as many people have fled the city, preferring, instead, to live in the suburbs. In some places, such as Philadelphia, it’s called “white flight,” as the majority of the people who left the city — almost one million, in all — were white.

The areas where those people have moved, sometimes small developments which numbered homes in the handful initially, are now full-fledged communities. Areas such as Levittown, Pennsylvania, are examples of this. Others include the west side of Monee, Illinois, as well as many areas in Bourbonnais, Illinois. Look at Phoenix, Arizona, listed as the fastest growing community in America. Just 100 years ago, it had a small population, yet today its population tops more than 1.5 million residents.

Being a homeowner means you’re responsible for maintaining your home; it means you’re responsible for paying your bills — the mortgage, the homeowners insurance, the property taxes and any other taxes, all your utilities, and then affording the basic necessities of life, such as clothing, food, transportation, education, and such. If you can’t do that on your income, then being a homeowner is not for you.

Congress, back in March, had hearings on this very matter. I guess the civil rights groups didn’t pay much attention to those hearings.

Statistics on loans to blacks and hispanics

According to the Real Estate Journal, a guide to property published by The Wall Street Journal, the Center for Responsible Lending estimates that throughout the U.S., more than half of all home loans to blacks and about 40 percent of all home loans to Hispanics in recent years have been what’s called “sub-prime loans.”

In a MoneyCentral article on MSN, by Marilyn Lewis, she notes that the answer whether someone who currently is buying a home could afford to refinance. She writes: “The short answer, of course, is that it depends.”

Lewis quotes Christopher Cagan, director of research and analytics for First American Real Estate Solutions in Santa Ana, Calif., as saying:

“The prime people will still be able to get loans. You’ll just have to have a down payment, documentation and a higher credit rating, (although) I think there will be even some tightening in the prime.

“It’s the marginal people going for the subprime, low-doc loans who’ll feel the change,” he says. “They’re going to be asked, ‘Where’s your documentation? Let me check that appraisal. What’s your income?’ “

In the article, Lewis points out that people with FICO credit scores of 621 and higher are likely to get a loan without issue, and the higher the score, the less issue there will be. For those with scores of 620 and below, however, she quotes Cagan, again, who says things will be tough.

… “[I]t’s back to the old-fashioned rules,” Cagan says. With less money available, and with fewer buyers and a glut of houses for sale, lenders are requiring detailed application forms and documents detailing finances and income.

Lewis writes that Cagan “is predicting that 13% of the 8.37 million adjustable-rate mortgages sold from 2004 to 2006 will fall into foreclosure in the next six or seven years, and that certainly will be disastrous for the 1.1 million families involved.

For people with lower incomes — those in the lower- to middle-class, times may be tough, especially for people wanting to purchase a home. For those with families, it will be even harder.

Defining the ‘new’ American Dream

Sure, the “American Dream” is one where you work, own a home, have a family, and whatever else you toss on top, much like a pizza. The revised American Dream for this generation, however, is akin to being able to afford to keep your family fed, gas in the family vehicle, clothes on the backs of all family members, being able to pay your bills, paying for educational needs, and perhaps having some money left over. For those earning — and dare I toss out a number — less than $50,000 for a family of two, or three, if the finances are tightly controlled, being a home owner just isn’t in the cards, nor is it really practical.

It is not a right to own a home. It is not a right to be given a loan. No, both are privileges, and both are based on your specific situation. If you’re a risk for the lender, of course you’re going to pay a higher interest rate for the loan. The chance is greater the lending organization will not recoup the money it loaned you.

In the past several years, and many have been beating the war drums telling tale the housing market will bottom out, that things will not be a “buyers market” for long. Yes, it did last about three years longer than many expected, but you can’t predict everything. What’s a certainty, though, is that if prices for homes go up, making a city too expensive for “average” people to live in due to housing costs, that city will collapse because everyone will leave.

The Center for Responsible Lending says that as a result of the subprime loans, that black home ownership has risen 35 percent since 1995. It continued, saying the the number of hispanics home owners has increased by almost 70 percent.

Now here is where the problem comes in.

Now that the economy has changed

A lot of people were given loans when the economy was different. The dollar went further; the housing market was in favor of buyers, not sellers; the price of oil was lower; and the list goes on.

Now, with the new economics over the past several months, there’s been a high rate — something some call “unprecedented” — in the number of defaults in the subprime loan markets because the loans generally have high interest rates because of the risks the lenders take in making the loan initially. On top of that, though, the interest rates “balloon” or increase over the life of the loan.

Civil rights organizations want a six-month moratorium on further foreclosures. Included in those organizations are the Leadership Conference on Civil Rights, the NAACP, the National Fair Housing Alliance, the National Council of La Raza and the Center for Responsible Lending. The organizations allege the lost of homes — mostly due to foreclosures — is falling disproportionately on minority homeowners.

Sadly, as lending statistics and information available from the Department of Housing and Urban Development have demonstrated for years, minorities are the prime candidates for the subprime loans chiefly because their income and credit scores are lower than the rest of the population.

The only answer is to outlaw these types of loans, making it almost impossible — nay, make it impossible — for anyone not fully qualified for a loan to get one. That would reduce the number of loan defaults and mortgage foreclosures, but not eliminate them all. There will always be some who are irresponsible in handling their money, not matter how much they have. Almost every time some wins a large sum in a lottery and decides to take a one-time payment, you see them filing for bankruptcy within a few years.

It’s not a racial concern, but a social one

Is this an issue solely about blacks and hispanics? Not by a long stretch. I know many people who cannot get loans for a variety of reasons. I know people working 80 or more hours a week who can barely live paycheck-to-paycheck. They aren’t black or hispanic. Instead of looking at everything as a race-based issue, instead, start looking at the overall picture and work for a common goal. I guess that isn’t the concern of race-based organizations such as the NAACP, the NSHP, and all the others.

Where’s the National Association for the Advancement of White People? Where’s the National Council of Injuns? Where are all the race-based groups for the so-called “majority” in this country — especially those who cannot get a loan, or, for that matter, those who are in default or facing foreclosure for the same reasons stated in the article at NSHP? The organizations don’t exist, sadly.

I am all for launching the National Coalition of Injuns. Since I am half-white, I will even support launching the National Association for the Advancement of White People.

What it all comes down to, at the end of the day, is if you can’t pay for the loan, don’t ask for the credit. That applies to everyone: white, black, injun, green, red, purple, or blue. It applies to everyone, not select racial groups. It’s called being fiscally responsible.

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