Posts Tagged ‘Mortgages’

Low-Income Households Get Relief From Hurricane Sandy

June 3rd, 2013 No comments

By *Jennifer Rutter

Blog Topic: Housing/Entitlement Programs

Low-Income Households Get Relief From Hurricane Sandy

Hurricane Sandy produced devastating affects on hundreds of thousands of people, but its aftermath has had a greater impact on low-income households.  Of the Sandy-related federal aid claims made by New York and New Jersey households, 43% had an income less than $30k while 68% of renters that made FEMA claims were low-income.[1]

Fortunately, the Department of Housing and Urban Development (HUD) has acted quickly and released the first round of the $16 billion in Community Development Block Grant funding from the Disaster Relief Appropriations Act of 2013 designed to restore housing and revitalize the economy in the regions most impacted by Hurricane Sandy.[2]

New Jersey’s Housing Voucher Program, funded by HUD, is providing displaced low-income households with vouchers to assist people in obtaining a permanent residence, which has been especially hard for renters.[3]  Homeowners in New Jersey may also be eligible for a mortgage forgiveness if they are unemployed or underemployed.[4]

Additionally, affected homeowners with Federal Housing Administration (FHA), Fannie Mae, or Freddie Mac mortgages that are facing foreclosure have been given an additional 90 days and the FHA has agreed not to evict persons in impacted areas through April 30, 2013.[5]

Although income levels made no difference to Hurricane Sandy’s path, the government has recognized the higher necessity among the impacted low-income households and acted accordingly.


The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.


American Scheme

November 4th, 2012 No comments

Blog Category: The Economics of Discrimination

Written by: *Brandon Perloff

Before the “Great Recession” beginning in 2008, the average, informed American never heard of the term “subprime mortgage,” but now, the term can now be heard on on Main Street just as frequently heard on Wall Street.  The hardships of the financial crisis has not, however, affected everyone equally. Three major metro Atlanta counties has identified the cause of that disparate effect on another increasingly more commonly heard term “predatory lending.”[1]

For borrowers, a predatory loan is just as sinister as its name suggests.  It is a loan excessively higher than those granted to similarly situated borrowers, not justified by the borrower’s credit-worthiness, and is secured by the borrower’s home.[2]   After reality sets in and the borrower defaults on the loan, the “American Dream” of owning your own home soon becomes a nightmare after lenders swoop in for the foreclosure.[3]

Three Georgia counties, DeKalb, which was 54.4% African- American in 2011, Cobb (25.9 %), and Fulton (45.45%), are suing the London-based mortgage lender HSBC under the federal Fair Housing Act (“FHA”).[4]   The FHA makes it illegal to “discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, color, religion, sex, familial status, or national origin.”[5]   HSBC allegedly took advantage of minority borrowers by placing them in mortgages they couldn’t afford, or accompanying expensive loans with high fees when they might have qualified for cheaper mortgages.[6]   According to the complaint, HSBC generated billions in fee income nationally by using improper marketing tactics to lock African-American and Hispanic borrowers into subprime loans.[7]  Tactics included: targeted mailings, which offered credit cards, car loans and other consumer credit lines were used to “up-sell” clients to high-cost mortgages that were more lucrative to HSBC, which placed the volume over the quality.[8]

Kevin Jacques, a finance professor at Baldwin-Wallace College in Ohio and a former economist and regulator for the U.S. Treasury Department and the Office of the Comptroller of the Currency said, “We are seeing so many lawsuits because the banks got sloppy and abusive at times in their mortgage practices and their foreclosure practices. Now they have to pay for it.”[9]    Well that may be true, but is “paying for it” just another cost of doing business that allows billions of dollars to pour into their capital accounts? As more lawsuits are brought into federal courts, juries will have their say in determining if these suits are just another entry to the accounts payable column or serious deterrent.


*Brandon Perloff is currently a staff member on the Widener Journal of Law, Economics & Race. To learn more about Brandon Perloff, click here to visit his page: Brandon Perloff
[1] Atlanta Banker. Law News, Metro Atlanta Counties Sue HSBC for Predatory Lending, BEFOREIT’SNEWS.COM, (Oct. 20, 2012, 0:12),
[2] Id.
[3] Id.
[4] United States Census Bureau, State & County QuickFacts, (last visited Oct. 20, 2012, 5PM), available at
[5] Discrimination in the sale or rental of housing and other prohibited practices, 42 U.S.C.A. § 3604(b) (1988).
[6] J. Scott Trubey, Counties file suit in housing crisis, THE ATLANTA JOURNAL-CONSTITUTION (Oct. 18, 2012, 7:59 PM),
[7] Id.
[8] Id.
[9] Id.

ACLU vs. Morgan Stanley

October 29th, 2012 No comments

Blog Category: Race & Economics in the Media

Written by: *Megan A. Hunsicker

On October 15, 2012, the American Civil Liberties Union (“ACLU”) filed a lawsuit against Morgan Stanley for violating the Fair Housing Act, particularly for discriminating on the basis of race in the secondary mortgage market, which is where high-risk loans are bundled and marketed to investors.

Specifically, the ACLU alleged Morgan Stanley sought high-risk loans disproportionally concentrated in non-white neighborhoods—“Subprime loans were five times more likely to be found in African American neighborhoods than in white neighborhoods”—with the expectation that those loans would default.

That practice directly conflicts with the provisions in the Amendments to Title VIII of the Civil Rights Act, which state that, “‘pooling or packaging loans’ on the basis of race is a violation of Title VIII.”  While the government has attempted to litigate the harms of the subprime crisis under fraud principles, this lawsuit is the first major lawsuit to advance claims under the Civil Rights Act.

If the lawsuit is successful, the implications will be profound and staggering, considering the damages suffered from predatory lending practices, which triggered the foreclosure crisis, and the importance of framing the issue and damages as a civil rights violations.


*Meghan A. Hunsicker is the Internal Managing Editor on the Widener Journal of Law, Economics and Race. To learn more about Meghan A. Hunsicker, click here to view her page: Meghan A. Hunsicker
John A. Powell, Civil Rights Today: The Landmark Case of Adkins et. al. v. Morgan Stanley, EQUAL JUSTICE SOCIETY (October 17, 2012),