National Urban League President Unveils 6-Point 'Homebuyer's Bill of Rights' to Increase Homeownership in United States, Especially for Blacks

Mar 06, 2007, 00:00 ET from National Urban League

    WASHINGTON, March 6 /PRNewswire-USNewswire/ -- National Urban League
 President Marc Morial today unveiled a six-point Homebuyer's Bill of Rights
 to boost homeownership in the United States, especially among African
     "Greater homeownership means greater personal wealth, which, in turn,
 means greater economic empowerment, the civil right of the 21st Century,"
 Morial said in a speech at the National Press Club in Washington, D.C. "It
 is also helpful in closing the gap that exists between blacks and whites in
 the United States."
     In 2004, African-American homeownership hit a historic high -- nearly
 50 percent, compared to 76 percent of white Americans, slipping to 47.9
 percent in 2006, thanks in part to increased foreclosures that are
 threatening decades of progress.
     Through six major policy recommendations, the National Urban League
 Homebuyer's Bill Of Rights is designed to minimize four major obstacles
 standing in the way of more Americans owning their own homes: 1) lack of
 net savings for downpayments and closing costs; 2) lack of information on
 how to shop for homes and apply for loans; 3) lack of quality affordable
 units in livable locations; and 4) lack of consumer protection.
     "It is not enough to put more Americans into their own homes if we fail
 to arm them with the tools needed to sustain homeownership. Far too many
 first- time homebuyers with limited financial experience have fallen into
 the trap of predatory lending where unscrupulous mortgage brokers steer
 them into unsuitable and exploitive mortgage products and turn their
 American Dream into the American Nightmare. The National Urban League
 Homebuyer's Bill of Rights seeks to reverse and eliminate this trend."
 Morial added.
                National Urban League Homebuyer's Bill Of Rights
     1.  The Right to Save for Homeownership Tax-Free
         Recommendation -- Create Individual Development Accounts for
         Homeownership administered by employers as matched savings plans for
         the future purchase of a home.
         --  Similar to 529 plans, the IDA for Homeownership would be a tax-
             advantaged investment vehicle designed to encourage saving for the
             future home purchase expenses of a designated beneficiary.
     2.  The Right to High-Quality Homeownership Education
         Recommendation -- Redesign of an industry-wide system that integrates
         pre- and post-purchase homeownership education and counseling; and
         expansion of HUD's budget for housing counseling from $42 million to
         $80 million in FY 08.
         --  HUD funding does not cover all costs of homeownership education
             and counseling and limits non-profits' ability to collect fees for
             their services. The private sector contributes only a small share
             of funding to homeownership education and counseling efforts, and
             even if the industry's (banks) support matched HUD's, non-profit
             education and counseling programs would be grossly under-funded if
             services were expanded to include a larger share of first-time
     3.  The Right to Truth and Transparency in Credit Reporting
         Recommendation -- Demystify the credit reporting system through
         creation of a public education and awareness campaign about credit
         scoring and its impact on wealth creation, and establishment of a
         penalty structure for credit reporting bureaus that maintain
         inaccurate client files.
         --  In the United States, once every 12 months, each person is
             entitled to one free credit report from each of the three
             nationwide consumer credit reporting companies: Equifax, Experian
             and TransUnion. Under fear of penalty, credit reporting agencies
             should be required to collect, maintain, and report data that is
             accurate, relevant, and up-to-date.
         --  The Government could offer a free publication called Understanding
             Your Credit Report and Credit Score. This publication would
             provide sample credit report and credit score documents with
             explanations of the notations and codes that are used. It would
             also contain general information on how to build or improve credit
             history, and how to check for signs that identity theft has
             occurred. The publication could be made available online.
     4.  The Right to Production of Affordable Housing for Working Families
         Recommendation -- Cities and other municipalities should through
         zoning and tax incentives require that at least 30% of all new market-
         rate construction be made available for purchase and rental by
         households comprising the locality's working families.
         --  Workforce housing includes single-family homes, townhouses,
             condominiums, starter homes, and apartments that are affordable to
             an area's workers such as: teachers, firefighters, municipal
             employees and the other workers who provide essential services in
             communities -- policing, healthcare, manufacturing, and retail
         --  A program that once held great promise in this regard -- HOPE VI
             is broken and should be re-thought and re-built. With a vague and
             changing mandate, HOPE VI strayed from its initial intent of
             rehabilitating 6% of the nation's public housing stock; instead,
             it has funded the demolition of housing and displaced many
             thousands of poor families to meet the demands of private
         --  New York City provides an innovative example of one such local
             approach to the issue. Under their current program, known as "421-
             a", developers of new buildings in most neighborhoods are eligible
             for a 10- to 15-year exemption from the increase in real estate
             taxes resulting from the work.  Developers do not receive a tax
             break unless 30 percent of all the units are affordable to
             families earning no more that 50 percent of the median income for
             the area, or about $35,000 for a family of four.
     5.  The Right to be Free from Predatory Lending
         Recommendation -- Elimination of incentives for lenders to make
         predatory loans; a fair, competitive market that responsibly provides
         credit to consumers; access to justice for families caught in abusive
         loans; and the preservation of essential federal and state consumer
         --  During recent years, responsible mortgage lenders and consumer
             advocates have recognized the urgent need to curb abusive lending
             practices that harm homebuyers and homeowners. NUL supports
             legislation that supplements existing law by promoting these basic
             objectives. NUL supports the "Prohibit Predatory Lending Act"
             (Miller-Watt-Frank) HR 1182.
     6.  The Right to Aggressive Enforcement of Fair Housing Laws
         Recommendation -- Create a HUD Task Force to vigorously investigate
         and prosecute violations of fair-housing laws and authorize
         congressional oversight hearings to hold HUD accountable.
         --  In a multiyear study using homebuyer "tests" funded by HUD and
             completed in 2005, the National Fair Housing Alliance found that
             potential homebuyers were steered to white or minority
             neighborhoods 87% of the time.
         --  The Task Force would investigate and process mortgage lending
             complaints, including such actions as inappropriate steering to
             sub-prime loans, stricter qualification standards for minority
             borrowers and higher rates and/or conditions for minority
     National Urban League ( Established in 1910, The
 Urban League is the nation's oldest and largest community-based movement
 devoted to empowering African Americans to enter the economic and social
 mainstream. Today, the National Urban League (,
 headquartered in New York City, spearheads the non-partisan efforts of its
 local affiliates. There are over 100 local affiliates of the National Urban
 League located in 36 states and the District of Columbia providing direct
 services like job training, home ownership and educational assistance to
 millions of people nationwide along with extensive advocacy and research.

SOURCE National Urban League