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Beyond the old Rhetoric: Dream of Homeownership a Nightmare for Blacks.

July 16, 2015 by  
Filed under News, Opinion, Weekly Columns

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( Without argument the sub-prime mortgage crisis was the most devastating economic attack against Black America in history. We saw it coming, but did nothing about it. Mainstream banks such as Wells Fargo showed no shame in fleecing Black communities. Fannie Mae and Freddie Mac (two government sponsored enterprises) strayed way off their charters and soaked up severe amounts of risk. It began to crumble in 2008 and within two years, Black America lost more than 35 percent of its collective net worth. The saddest thing is that this fiscal slide has yet to stop for us.

The Dodd-Frank Act, which was supposed to stop the bleeding, has made things worse. Credit requirements and mountains of paperwork are prohibiting much of the Black population from capital access. Mortgages in our communities are still becoming less and less available. The U.S. Department of Housing and Urban Development (HUD) seems to have no focus on this matter. It is sidetracked with looking at housing discrimination. After six years of being under the administration of a Black president, we are worse than ever before.

According to The Joint Center for Housing Studies of Harvard University’s annual “State of the Nation’s Housing, “Overall, home ownership, the cornerstone of the American Dream, is down to 63 percent, a far cry from the 69 percent registered in 2004. Those figures, however, are much worse for minorities, especially Blacks. The homeownership rate for minorities continues to lag: It peaked at 51.3 percent in 2004, and has now fallen to 47.2 percent. Of all minority groups, African Americans have the lowest rate of homeownership, just 43.8 percent.”

It is getting worse. The key to American homeownership were our two Government Sponsored Enterprises (GSE) – Fannie Mae and Freddie Mac. After World War II and the beginning of the mortgage component within the GI Bill of Rights, our nation went into a housing boom and created a viable middle class with home equity being the biggest part of a family’s net worth. This gave Americans a big advantage over people in other nations who had no GSE programs. So now guess what the Obama administration is trying to do? They want to kill Fannie Mae and Freddie Mac. Instead of policing the programs and allowing them to grow back to their former greatness of allowing home mortgages throughout our nation, they want to put a bullet through their heads. This is very serious and it is going through the courts.

It is so serious that the National Black Chamber of Commerce is jumping into the fray. We have filed an amicus, called friend of the court, brief in the federal court of appeals. Here is an overview that we formally submitted:

Amicus curiae the National Black Chamber of Commerce (“NBCC”) is a nonprofit, nonpartisan organization dedicated to the economic empowerment of African-American communities through entrepreneurship. Incorporated in 1993, the NBCC represents nearly 100,000 African-American owned businesses and advocates on behalf of the 2.1 million Black-owned businesses in the United States. The NBCC has more than 190 affiliated chapters located throughout the nation, as well as international affiliates in, among others, the Bahamas, Brazil, Colombia, Ghana and Jamaica.”

“Because the NBCC is dedicated to creating economically-thriving African-American communities, it is extremely concerned about the prospect that the Federal Housing Finance Agency (“FHFA”) will effectively eliminate Fannie Mae and Freddie Mac. The NBCC believes that without those corporations providing for affordable credit, African-Americans will be disproportionately unable to obtain conventional mortgages. Thus, if the FHFA is allowed to complete its attempted liquidation of Fannie Mae and Freddie Mac, affordable credit may well dissipate for minorities (who already have a very difficult time obtaining loans). The NBCC therefore asks this Court to consider these interests in the course of its deliberations on this case.”

The above is our Statement of Interest portion of the Amicus Brief, which is 18 pages long. We must make all of Black America aware of this. Does the Congressional Black Caucus have a concern? What about all of those Civil Rights organizations that have been around since the beginning of the 20th Century? What is their position on home ownership? How about the National Black Caucus of State Legislators? I don’t find the outrage anywhere.

If the federal government has its way, the future of mortgages will be up in the air. Our subdivisions will turn to blankets of rentals and their values will sink much further than they have already done. That’s why we are fighting this. Our financial future is on the line and it could have a negative impact on the quality of life for our children, grandchildren and their children. We have no choice but to fight.

Written By Harry C. Alford

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2 Responses to “Beyond the old Rhetoric: Dream of Homeownership a Nightmare for Blacks.”
  1. hoodgirl says:

    A potential homeowner should meet the following prerequisites before considering a mortgage loan (1) ensure principal, interest, taxes and insurance is less than 25 percent of net income (2) eliminate or “substantially” reduce debt (3) save at least 6 months of cost of living expenses to cover emergencies and (4) have a minimum down payment of 10 percent of the sale price.

    Unfortunately too few have the discipline to undergo the above steps which is why FannieMae, FreddieMac, NACA, etc. exist to serve them with taxpayer dollars while willfully ignoring signs revealing that they are simply just not ready for the financial responsibility associated with homeownership.

    Thus, the American Dream too often turns into a nightmare for many homeowners. FYI, Wealth Building starts by owning debt free assets not borrowing against them!

  2. Cicero says:

    The narrative is negative… I like positive narratives.

    While the Housing Industry is getting ready to ascend once again (9 months ago the Fed annouced 580 credit scores and 3% down program),
    we (africans) are being led on a negatie voyage away from home ownership. As if Rents are lowering…

    Part of the reason why the ” white privilege ” concept exist is that through the help of the FHA in the early days gave them an easier avenue to home ownership while blocking us out.

    Home ownership is one of the best financial leveraging tools that can be used to build wealth i.e. loans … like the ones to send kids to college for example.

    Your portfolio is sooo much stronger with home ownership vs with-out. Like they say buy the House 1st …then the Car.

    Economics and Politics are tied side by side, but often those who wish to discuss or write on the subject are one trick ponies…

    STOP LETTING FEAR STEER… Have Faith and avoid Adjustable Mortgages
    Fannie and Freddie just moved to the back channels for aquisition by the elite, it got fleeced at best and still trades on the exchange…way way way too many properties to just go poof… for now

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