The National Association of Hispanic Real Estate Professionals (NAHREP) and the National Council of La Raza (NCLR) released “Saving Homes, Saving Communities: Latino Brokers Speak Out on Hispanic Homeownership,” a joint report offering analysis on the impact of predatory lending practices on Hispanic homeownership and an insider’s view on ways to reduce and discourage such practices. The report’s findings and recommendations were derived from roundtable discussions with 56 NAHREP members, who are practicing mortgage professionals in six U.S. cities with high concentrations of Hispanic homeowners.
Some of the contributing factors of predatory lending practices identified by the participants include insufficient licensing standards, a lack of continuing education and flexible mortgage products, and unequal broker compensation rates for different types of loans.
“Hispanics are the only minority group in the United States whose homeownership rate is steadily climbing, but this growth comes with the price of predatory lending practices,” said NAHREP President and CEO Tim Sandos. “This report clearly demonstrates the need for industry stakeholders to take decisive steps to ensure that real estate professionals in the Latino community and beyond promote responsible lending and protect vulnerable borrowers.”
“Homeownership represents the ultimate symbol of the American Dream, but Hispanics are too often the victims of predatory lending practices that prevent them from realizing this dream,” added NCLR President and CEO Janet Murguía. “Policymakers and the industry as a whole need to take action to end such tactics from the marketplace so that all Americans are equally protected when buying a home.”
The authors of the report make recommendations to policymakers and industry stakeholders to help eliminate abusive lending and to create a fair and efficient marketplace for vulnerable borrowers.
* Strengthen enforcement and licensing standards for all originators.
* Create a clear ethical standard by which all mortgage originators will be held.
* Create market incentives to prompt the development of affordable home loan products.
For industry stakeholders:
* Make affordable loan products more competitive and accessible in the home lending market.
* Set the borrower up for success by making loans they can afford to repay.
* Partner with counseling providers to educate borrowers on homeownership.
“Saving Homes, Saving Communities: Latino Brokers Speak Out on Hispanic Homeownership” also provides basic tips for consumers to protect themselves during the homebuying process. Those include attending educational seminars, setting strict budget limits, researching the best products available to them, conducting an independent home inspection before buying and reporting abusive practitioners.
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