BODY: Growing numbers of black families are falling
victim to predatory mortgage lending schemes that often lead to foreclosure or
financial ruin, a lawyer specializing in the field said Sunday.
The growth in predatory lending, and its
disproportionate impact on black families, represent an important new challenge
for the NAACP and other civil rights organizations, said Paul D. Young, a
partner in a New York law firm that has filed lawsuits charging lenders with
unfair or deceptive practices.
He spoke at the
continuing legal education seminar during the National Association for the
Advancement of Colored People's national convention in Houston.
Young said predatory lending is a particularly
egregious form of subprime lending - loans with higher interest rates and fees
than prime loans.
Tactics employed by predatory
lenders include kickbacks to mortgage brokers who purport to represent the
borrower when in fact they are colluding with the lender, loans drawn up with
terms the lender knows will likely lead to a default, and exploitation of buyers
who are poorly educated or unsophisticated, Young said.
He cited a study showing that subprime lending increased almost tenfold
between 1993 and 1999, with "an especially high concentration of subprime loans
among minority borrowers that goes well beyond a fair representation of their
credit quality."
In a 1998 study comparing black and
white neighborhoods in New York with similar economic characteristics, 13
percent of the loans in the white neighborhood came from subprime lenders,
compared with 51 percent of those in the black neighborhoods.
Young said decades of "redlining" - the illegal practice of refusing to
grant mortgage loans to residents of minority neighborhoods - created a
vulnerable market of inexperienced home buyers conditioned to believe they would
not qualify for traditional loans.
"Into that vacuum,"
Young said, "have gone the subprime and predatory lenders."
Groups like the NAACP, Young said, should lobby for stronger state and
federal laws to restrict unfair or deceptive lending practices and develop
widespread consumer education efforts.
Empowering more parents
In another legal education presentation Sunday, a Washington, D.C.,
attorney said President Bush's "No Child Left Behind" legislation isn't perfect,
but could be a powerful tool to battle racial inequality in education.
The new law could help parents battle the often
stereotypical, negative views that educators have about inner-city children,
said Patricia Brannan, an expert on education and civil rights law.
"I think this is going to smoke out some of those
attitudes and give parents more power to be able to go in and say 'Wait a
minute. It's not just my kid that's the problem. Something else is going on here
with your school.' " Brannan said. "I think this gives a lot of communities and
parents an opportunity for access."
The "No Child Left
Behind" law, signed by Bush Jan. 8, requires annual testing for students in
grades three to eight; attempts to erase the gap in scores between white
students and black and Latino students within 12 years; and penalizes failing
schools.
It also includes stricter accountability for
schools and superintendents and gives parents more options.
"Parents of children in a school that is considered in need of
improvement must be given the option of transferring their child to a school
that is not considered in need of improvement," Brannan said. "Parents must also
be given the option of choosing supplemental things to help improve their
child's education - things like tutors."
Brannan said
the disparity in education is influenced by teachers who enter inner-city
schools early in their careers, then transfer to more prosperous suburban
districts after they've earned more seniority.
Under
the new law, school districts are required to ensure that low-income or minority
children are not taught more frequently by less experienced teachers.
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