Transcripts

Minority Homeowners Search For A Lifeline From The Mortgage Mess

PAUL KANGAS: The mortgage meltdown has hit Hispanic and African American householders especially hard. The groups hold a disproportionately high number of sub-prime loans that have failed or are at risk of falling into foreclosure. Today, the National Association of Hispanic Real Estate professionals met in Washington to discuss solutions to protect homeowners. Stephanie Dhue reports.

STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Sub-prime mortgages are the most likely to end in foreclosure. Nearly half of all loans made to Hispanics and African Americans at the peak of the real estate boom were sub-prime. The National Association of Hispanic Real Estate Professionals or NAHREP, is promoting a plan to help low- and moderate-income borrowers. Tim Sandos, who heads the group, says the key is to ensure would-be borrowers can get loans.

TIMOTHY SANDOS, CEO, NAT'L ASSN. HISPANIC REAL ESTATE PROFESSIONALS: Sustaining the opportunity for homeownership is, in our opinion, the way out, because we have to start to purchase that inventory, get pricing stability in communities. That will be the only way that we can reverse the trend of downward pricing.

DHUE: NAHREP's plan supports creating a national foreclosure prevention fund, giving incentives to banks to work out loans and creating a policy for identifying and assessing risk in what lenders call declining markets. Miami-based mortgage lender Tino Diaz says lawmakers, regulators and the industry need to do more to preserve home ownership for minority families.

TINO DIAZ, CEO, VERTEX MORTGAGE BANKERS: To the minorities, the home represents almost 2/3 of their wealth. It is huge. It is the, the wealth- formation instrument and so it has an undue impact on those groups when you finally get into a home and now you are losing it -- it is devastating.

DHUE: NAHREP is aiming its message at lawmakers. The group commissioned a study on the distribution, by congressional district, of sub-prime loans. Maurice Jordain-Earl put the study together. He says it shows areas like Detroit and Miami are prime targets for NAHREP's plan.

MAURICE JOURDAIN-EARL, MANAGING DIRECTOR, COMPLIANCE TECHNOLOGIES: The data exists to know where the sub-prime rate loans were and to whom and the situation may be different if it's an immigrant or English as a second language or if there are different cultural habits in terms of how to deal with credit.

DHUE: When the housing market was booming, sub-prime loans were touted as a way to boost minority home ownership. But with the boom now bust, minorities may end up losing ground. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.