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Apr 20th

Bush proposals to help those at risk of home loans foreclosure needs close scrutiny

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Bush proposals to help those at risk of home loans foreclosure needs close scrutiny

Recently, the Bush administration announced plans to help turn back the tidal wave of mortgage foreclosures now facing hundreds of thousands of Americans by proposing changes to the Federal Home Administration (FHA) mortgage lending guidelines.
Bush proposals to help those at risk of home loans foreclosure needs close scrutiny

Recently, the Bush administration announced plans to help turn back the tidal wave of mortgage foreclosures now facing hundreds of thousands of Americans by proposing changes to the Federal Home Administration (FHA) mortgage lending guidelines.

The administration is finally reacting to the tide of homeowners who are delinquent in their mortgage payments, which is only expected to deepen as the surge of millions of mortgage holders facing ARMS, adjustable rate mortgages, coming due in the next three years.

The Bush administration proposal calls for allowing a greater number of people to refinance with FHA insurance if they are past due on their mortgage payments, as long as they fell behind as a result of their ARM, or interest rate rising. According to the administration, the number of homeowners staring these ARMS in the face over the next two years is two million people - with a total value of $500 billion in loan payments due.

A Washington Post story dated August 31 reported that homeowners need to have a good payment history up until the time that the ARM materialized in order to receive FHA assistance. The Post reported that "senior administration officials estimated that the change would allow an extra 80,000 homeowners to receive a federally insured mortgage in 2008 on top of the 160,000 already forecast to use the program."

Although the changes proposed by the Bush administration are positive, albeit tardy, these FHA rule modifications should be welcomed by homeowners and most certainly will be embraced by mortgage lenders.

Even though the Bush administration does not need congressional approval to enact these changes, it is important to lift up the work of U.S. Representative Keith Ellison, (D) Fifth Congressional District, who has championed the cause of fairness in lending long before the issue of predatory lending and mortgage foreclosure prevention appeared on the Bush administration radar screen.

Recently, Representative Ellison brought U.S. Representative Barney Frank, (D) Massachusetts, chairman of the House Finance & Banking Committee, to the downtown Central Library for an actual congressional hearing on predatory lending in order to call attention to this national crisis.

State Senator Linda Higgins, Representative Keith Ellison and Representative Joe Mullery have provided continued leadership in the area of mortgage foreclosure prevention and long warned Northside residents about less-than-aboveboard lending practices quickly and sleazily oozing into our community.

With the president proposing modest, yet substantive FHA changes, it is prudent that we pause to be reminded of the FHA's history in serving African American communities across the nation.

It was only a few decades ago that the FHA was renowned for refusing to provide African Americans with FHA insured home loans.

Minneapolis was not unlike many other cities in the nation that experienced the historical cold shoulder of the FHA, as told by Elaine Latzman Moon, author of "Untold tales, unsung heroes: an oral history of Detroit's African Americans."

In her acclaimed book, Latzman Moon writes of her hometown Detroit:
At the time there was a Black community. It was downtown on the east side and very distinct. It was locked in there, and gradually began to move north on Brush Street, then St. Antoine and Hastings. As the Jewish community moved north, the Black community expanded behind it. When the Jewish community hit the boulevard, that was it. They didn't cross the boulevard directly, and so they leapfrogged and went from the east side at the [Grand] Boulevard to Dexter, 12th, and 14th. It was just understood that if you were Jewish, you didn't move into a W
 

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