I’ve read some articles, in which the mortgage counselors were the same ethnicity as the applicant. That makes an interesting slant. Minorities targeting minorities with white products to generate more green.
Outside the New York Stock Exchange Dec. 10, holiday music competed with the chants of “Save our homes!” The rally, which demanded “Restructure loans, don’t repossess homes,” was called by the Rev. Jesse Jackson, who heads the Rainbow/PUSH Coalition.
Disputing efforts to blame borrowers for not reading (or understanding) the “fine print” of shoddy mortgage agreements, Jackson said the current crisis is really the result of “outright scams and schemes” by lenders and brokers. He argued that they created artificially low credit scores, particularly for African American homebuyers, and artificially inflated home prices, thereby foisting outrageous interest rates on working families.
It is a sad state of affairs when the killing shots are friendly fire. Most of the quotes from the people in foreclosure describe their mortgage counselor or broker as nice and sincere. Many of them felt secure because the mortgage counselor was the same ethnicity and spoke the same language. The underlying problem is not restricted to language or color. It is a lack of experience and education, the reluctance to ask questions, and the immediacy promoted that causes borrowers to rush through the process without reading and understanding the contracts and disclosures. I had black mortgage consultants. Some were better than others, but that is the same in any profession. There will always be differences. Some are more professional, knowledgeable, and personable than others.
A big a problem is red-lining an area by address and penalizing any purchaser within a geographic location with a subprime loan. Gender and race are not required information on credit applications today. That information has not been required for years. It stands to reason that a person will purchase in a neighborhood in which they feel comfortable. If the neighborhood is a minority, then there is a higher probability the buyer is also minority. It is easier to target a zip code based on the demographics than target individual applicants.
It behooves the borrower to have an established track record with credit from a national bank (credit card) that gets recorded on their credit report. Know the prime rate at the time of their application, not necessarily the rate they are quoted, and how their credit score effects the rate they will be given. Do not give in to haste or be driven by desperation, and most of all do not trust anyone earning a commission for their performance in helping you obtain a loan. After all, there are black widow spiders out there that prey on their own. After the papers are signed and the contract consummated, you are only more fodder.
Timothy Blake and Jen provide the most detailed personal finance blog ever, covering major bank complaints, debt settlement scams, and the mortgage crisis. Use Super-Search to find anything, download from the document library and research 6-in-1 personal finance