Housing v. Human Rights

Yesterday I attended a New York State Banking Department conference on Abusive Lending called HALT.

It was an interesting educational conference for me, though it seemed as though many attendees wanted a forum to air their grievances with the subprime foreclosures throughout the state.

A couple of thoughts about the conference:

First off, is this a human rights issue? I can see that shelter is a human rights issue, but is home ownership? There are most likely some discrimination issues afoot. From the data it seems as though minorities have been placed into subprime mortgage products far more, particularly African-Americans and Hispanics who appear to make up the bulk of the subprime borrowers. There might have been other products for some of these borrowers.

I don't think this is a human rights issue up there with hunger, shelter, false imprisonment and other basic human rights. I'm not trying to lessen the impact, nor mitigate the blame, I just don't think it falls under this category.

The other issue that I heard frequently is a 6 month moratorium on foreclosures. Even Senator Clinton is calling for this in Congress. I don't know if this is a solution either. There are some borrowers who have taken out loans that they cannot repay, if this is the case, these loans should result in foreclosure. I don't know if it's the lender's fault for loaning the money to them. There are others who are victims of fraudulent colusion between real estate brokers, mortgage loan originators and appraisers who may have originally overpaid for their property (how they didn't check on the internet for comparable sales is beyond me), these homeowners should certainly seek some relief until a solution is found for them either dealing directly with the lenders or with a regulatory agency.

Pointing Fingers

Interesting how no one wants to take responsibility. It's all "pass the buck" all the time. I read an article in the Post that Mayor Bloomberg laid some of the blame for the rise in New York foreclosures on the borrowers themselves for taking out loans they knew they could not pay. Housing and consumer advocates say the Mayor is wrong, that the lenders are to blame.

So if the disclosures are confusing to consumers, and they don't understand the Good Faith Estimate and the Truth-In-Lending Disclosure, is more of the same the answer? Wouldn't it be a better response to try to simplify a document that at more than one closing I've attended has been described by the borrower's attorney as "it's confusing, just sign it."

I guess it's one of the those cases of "it's going to get worse before it gets better."