NAACP's March on Mortgage Madness

NAACP is holding a call to ARMS and I do mean adjustable rate mortgages.

While on one hand major mortgage companies touted their increase in lending to minorities, the other hand was allegedly pick pocketing hard earn dollars by charging higher fees and interest rates on loans.

The NAACP designated July 2 as a National Day of Action against mortgage discrimination. The day was marked by events across the country, including New York City, Baltimore, Chicago, Detroit, Wilmington, Del., Long Beach, CA, Reno, Salt Lake City, Seattle, St. Louis, Durham, NC, Columbia, SC, Memphis, Nashville, Chattanooga, and Jackson. ...

Forclosure Crisis

People demonstrate outside a HOPE NOW home ownership preservation workshop at the University of Pennsylvania in Philadelphia, Tuesday, April 1, 2008. Demonstrators hoped to draw attention subprime mortgage crisis. (AP Photo/Matt Rourke)

AP
Joseph Barratt, 55, and others demonstrate outside a HOPE NOW home ownership preservation workshop at the University of Pennsylvania in Philadelphia, Tuesday, April 1, 2008. Demonstrators hoped to draw attention subprime mortgage crisis. (AP Photo/Matt Rourke)

AP
LAGUNA HILLS, CA - MARCH 28: A foreclosure sign stands in the yard of a house to be sold in an upcoming 11-day foreclosure auction of more than 1500 southern California homes March 28, 2008 in Laguna Hills, California. Cleaning up foreclosed properties is full-time work as home foreclosures are booming in the wake of the sub-prime loan crises, leading to abandoned and run-down properties that suppress neighboring home values and lower property tax revenues. Sub-prime loans make up 14 of total mortgages but account for about 60 of foreclosures. (Photo by David McNew/Getty Images)

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LAGUNA HILLS, CA - MARCH 28: Sebastian Villalba mows grass and weeds to prepare a house to be sold in an upcoming 11-day foreclosure auction of more than 1500 southern California homes March 28, 2008 in Laguna Hills, California. Cleaning up foreclosed properties is full-time work as home foreclosures are booming in the wake of the sub-prime loan crises, leading to abandoned and run-down properties that suppress neighboring home values and lower property tax revenues. Sub-prime loans make up 14 of total mortgages but account for about 60 of foreclosures. (Photo by David McNew/Getty Images)

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LAGUNA HILLS, CA - MARCH 28: An Orange County Sheriff eviction notice hangs on a house to be sold in an upcoming 11-day foreclosure auction of more than 1500 southern California homes March 28, 2008 in Laguna Hills, California. Cleaning up foreclosed properties is full-time work as home foreclosures are booming in the wake of the sub-prime loan crises, leading to abandoned and run-down properties that suppress neighboring home values and lower property tax revenues. Sub-prime loans make up 14 of total mortgages but account for about 60 of foreclosures. (Photo by David McNew/Getty Images)

Getty Images
LAGUNA HILLS, CA - MARCH 28: Sebastian Villalba mows grass and weeds to prepare a house to be sold in an upcoming 11-day foreclosure auction of more than 1500 southern California homes March 28, 2008 in Laguna Hills, California. Cleaning up foreclosed properties is full-time work as home foreclosures are booming in the wake of the sub-prime loan crises, leading to abandoned and run-down properties that suppress neighboring home values and lower property tax revenues. Sub-prime loans make up 14 of total mortgages but account for about 60 of foreclosures. (Photo by David McNew/Getty Images)

Getty Images
LAGUNA HILLS, CA - MARCH 28: Sebastian Villalba mows grass and weeds to prepare a house to be sold in an upcoming 11-day foreclosure auction of more than 1500 southern California homes March 28, 2008 in Laguna Hills, California. Cleaning up foreclosed properties is full-time work as home foreclosures are booming in the wake of the sub-prime loan crises, leading to abandoned and run-down properties that suppress neighboring home values and lower property tax revenues. Sub-prime loans make up 14 of total mortgages but account for about 60 of foreclosures. (Photo by David McNew/Getty Images)

Getty Images
A crowd of protesters hold up anti-war signs Friday March 28, 2008, in Freehold Township, N.J., as one of the presidential helicopters lands near a company where President Bush was visiting to spotlight the administration's efforts to save struggling homeowners from foreclosure. The president plans to stop by a mortgage counseling company that's part of the "Hope Now" alliance. (AP Photo/Mel Evans)

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Bill Suky, right, points out the arriving helicopter of President Bush Friday March 28, 2008, in Freehold Township, N.J., to wife, Dolores Suky, second right, Lucille Cerbini, left and Francine Jordan, second left, as they stand with a gathering of Bush supporters. President Bush was visiting New Jersey to spotlight efforts to save struggling homeowners from foreclosure. The president plans to stop by a mortgage counseling company that's part of the Hope Now alliance. (AP Photo/Mel Evans)

AP
Diane Beeny holds up an anti-war sign as she stands with a large crowd of protesters Friday March 28, 2008, in Freehold Township, N.J., near a company where President Bush was visiting to spotlight efforts to save struggling homeowners from foreclosure. The president plans to stop by a mortgage counseling company that's part of the Hope Now alliance. (AP Photo/Mel Evans)

AP

The goal of the lawsuit and the Day of Action is to push these lenders to make amends for discrimination that they have perpetrated and to stamp out this sort of discrimination for good.

The lawsuit claims that victims in this case had the same credit, income and qualifications as these institutions' other customers. The only difference was that they were African American.

The lawsuit alleges that race was the reason ther loans had higher interest rates. These same consumers were being steered into adjustable rate mortgages when they could have easily qualified for fixed rate or more favorable terms. Some of the defendants in the lawsuit are household names like Washington Mutual Inc., Citimortgage and Suntrust Mortgage.

This is significant considering that these tactics are often associated with lenders who focus on subprime loans to folks with less than stellar credit. So you get a good education, a good job, pay your bills and still can't get a fair shake.

Here's how you avoid being taken advantage of:

1. Don't take the first offer. People spend more time negotiating airline fares than they do when they make the largest investment in their lifetime. Do some comparison shopping. Go to www.bankrate.com to compare rates.

2. Find a money mentor who is knowledgeable about finance.and take them with you. There is strength in numbers and your lender will be less likely to take advantage of you if there is a knowledgeable person asking questions.

3. Knowledge is power. Many community organizations have housing advocates who can help you understand and negotiate a mortgage. Visit http://www.neighborworks.org to find an organization n your community.

Are you in control of your finances or are you letting circumstances control you?

Deborah Owens is author of "Nickel and Dime Your Way to Wealth" and host of "Real Money" on NPR Affiiate www.weaa.org. For more wealthy lifestyle tips visit www.deborahowens.com

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