Hogar Encouraged Latinos to Take Sub-Prime Mortgages that Has Led to their Foreclosed Condition Today

April 23rd, 2009

Large number of Hispanics has been foreclosed upon. Their own organization, Hogar, actively worked in tandem with the mortgage industry to encourage them to take sub-prime mortgages. This has led to their foreclosed condition today.

One of the sponsors of Hogar is The National Association of Hispanic Real Estate Professionals. Based on shared research it marketed loans through its growing number of agents and brokers. NAHREP was funded by some of the big players who had made hefty donations to Hogar. About 22 sponsors from the corporate sector, including big names like Countrywide and Washington Mutual, subscribed $2 million annually to the association. Conferences and forums were organized wherein lenders peddled their loans to the mortgage brokers.

Tim Sandos the president of NARHEP said that against the backdrop of rising house prices during the time of the boom the risk involved seemed minimum at that time. All that one needed was a beating pulse to grant a loan, he remembers.

At the 2006 convention of NAHREP the slogan was “Place Your Bets on Home Ownership.” Among the speakers at the event were Angelo Mozilo of Countrywide and Henry Cosneros of HUD.

Sponsors like Countrywide took the help of NAHREP to organize regional meets to enable them to peddle their mortgage loans to brokers and customers. Sandos said that the organization did not get paid for promoting specific lenders.

During the peak years of the housing boom the mortgage companies, banks and other lenders gave $2.3 million as contributions towards campaign expenses of the Hispanic Caucus as per the findings of Center for Responsive Politics.

Last October a charitable body founded by California Rep. Joe Baca accepted $25,000 from AmeriDream Inc – the latter being a housing company (non-profit) and one of the sponsors of Hogar. Baca has been giving support to the company’s down payment assistance programme that is financed by the seller. AmeriDream arranged for the down payment for the buyers and the cost was covered by donations to the non-profit body. It was a much talked about controversial scheme and made illegal last autumn. Baca however is co-sponsoring a legislation that will permit non-profit groups to resume the practice by making down payment assistance to FHA low-income borrowers. Such types of loans make up one third of the loans that are backed by FHA. The default rate has been triple that of other loans.