Fight Back Against Mortgage Refinancing Discriminations |
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Minorities are the worst sufferers as far as mortgage discrimination is concerned. They are denied vital credit sources in spite of new state and federal lending programs. Conventional home mortgages and even government-backed FHA and VA loans are being denied to blacks about twice as often as whites. The same is true for home improvement and mortgage refinancing loans as blacks and Hispanics are still getting refused twice as often as whites. Even high-income blacks are turned down for mortgage refinancing in the same ratio as above. However, apart from discrimination, you may not qualify for mortgage refinancing if you have insufficient income for the home you want, poor credit or too many outstanding debts. By law, your lender must tell you in writing within 20 days of denial why you were rejected. You can, however, take recourse to arbitration if you can show that you were wrongly turned down. There are other resources and organizations that can help. To confront mortgage discrimination, you need to know the following: Whom can you call for starting the process? Most people are hesitant to come forward to make a claim, which is the biggest hurdle in housing discrimination cases. Very few people are willing to divulge their income, assets and credit history, which need to be disclosed while applying for a loan for mortgage refinancing, as it is a reflection of your personal credit history. This lays the ground for discrimination as it's embarrassing, according to Shanna Smith, executive director of the National Fair Housing Alliance (NFHA) in Washington, D.C. ACORN, the Association of Community Organizations for Reform Now has over the past 18 years been securing loan commitments for underserved communities across the country from commercial banks to the tune of $40 billion. It is a good source for gathering information but it does not provide direct, individual attention. Here is an eye-opener. In 1993, when mortgage interest rates dipped below 7%, Ricardo and Janet Bermudez decided to take the opportunity of mortgage refinancing to consolidate both their 15-year, 8.75% mortgage and 10.75% home improvement loan by borrowing enough to cover both obligations at a low 6.75% rate. Long Island Savings Bank (LISB) had provided them the original $46,000 mortgage just two years earlier and so they filed for a mortgage refinance loan with them. In 1991, they had been provided the original $46,000 mortgage but they were refused the home improvement loan of $10,000. However, a white contracting firm obtained a preapproved $16,000 home improvement loan for them from LISB. They went back to the bank and got LISB to grant their original $10,000 request. They were refused the mortgage refinance loan and Ricardo told his story to a friend who had received a copy of the July 1993 issue of Black Enterprise. The cover story was How To Fight Mortgage Discrimination and Win! The article confirmed that they were victims of mortgage discrimination. Janet and Ricardo found the NFHA to be an advocacy group for dealing individual mortgage refinancing problems. In July 1993, they were referred to a local affiliate, the Long Island Housing Services (LIHS), where they met with Michelle Santantonio, a fair housing enforcement coordinator who concluded that the Bermudezes had a legitimate case against the bank considering their annual income of $54,200 and documentation to back their claims. It took almost another year before Janet and Ricardo, with LIHS acting as their representative, could file an official complaint. According to Santantonio, Janet and Ricardo had two options to fight for their rights of getting mortgage refinancing: they could either file a discrimination case with the New York State Human Rights division, or file a fair housing discrimination grievance with HUD. They preferred the latter. Santantonio explained, The big benefit of filing with HUD was if there was a determination in your favor, you have the right to go to federal court and be represented by the Civil Rights Division of the U.S. Justice Department. The couple would have had to hire an attorney and file a separate case with HUD, if they had gone to the state agency first. LIHS provides lawyers to consult or file the case on your behalf at no cost. |
