By Conference of Mayors Vice President Hempstead (NY) Mayor James A. Garner
November 4, 2002

On Tuesday October 15, I had the privilege of participating in the White House Conference on Minority Housing, held at George Washington University in our nation's capital. It was a very enlightening experience as we heard from a number of experts and public officials who spent the better part of the morning emphasizing the importance of home ownership among minorities.

President George W. Bush set the basic theme of the day when he addressed the participants and the audience. In his remarks, the President noted that, while two-thirds of all Americans own their own homes, less than half of the Hispanics and half of the African-Americans own homes. He called it a home ownership -gap- that must be closed. I strongly agree. We need to do everything we can to remove those barriers that prevent minorities from owning their own homes.

This was by no means the first time this problem has come up for discussion. In my duties as Vice President of the U.S. Conference of Mayors and serving on the board of the National Black Conference of Mayors, we have often wrestled with this issue. Minority home ownership has also been a major issue in my home community of Hempstead, Long Island, a large suburban village of over 70,000 residents comprised of a significant number of minorities.

When President Bush announced his plans to increase minority homeownership by 5 million before the end of the decade, I knew that our experience in Hempstead could certainly help him reach that goal.

What we found over the past decade was that many minorities were being deprived of the ability to purchase or maintain their homes due to predatory lending practices. Sadly, many of the unscrupulous lenders viewed minority homeownership as a means to make a quick buck. The result was a large number of minority homeowners were losing their homes due to the outrageous terms established by the predatory lenders.

As Mayor, I could not stand by and watch so many of our minority homeowners suffer. That's why I introduced legislation this past summer to end this despicable practice. To their credit, other levels of government were already looking into this problem, but I felt that we needed to adopt local action right away, and that we could fold our law into state and/or federal regulations should they be adopted later on.

Therefore, we adopted a local law that requires our village to cease doing all business with creditors that engage in abusive lending. This type of local law is starting to raise considerable interest among municipalities throughout the country. It was our goal to curb predatory lending practices in Hempstead by sending a clear message to abusive lenders: you-re not welcome in our village, and we-re not going to do business with you!

Under the law our village will cease doing business with any creditor or lender who violates the following practices, which are prohibited under the new law:

• use of single-premium credit insurance financed by a home loan.
• forced arbitration.
• abusive prepayment penalties.
• financing of excessive points and fees.
• call provisions demanding immediate repayment of the loan balance.
• subterfuge through business associates.
• any pattern or practice that disregards state or federal law.

The law also requires the village to pull business from any lender or creditor who directly, or through an affiliate, makes more than 100 home loans annually and fails to sign a statement indicating compliance with this law.

I am very optimistic that this new law will help stamp out the predatory lending practices that discourage minority home ownership.

Homeownership is the foundation upon which our country is built. It is the key to establishing and sustaining livable and safe neighborhoods. A home is more than shelter, it is the place where children are nurtured, memories are created and futures are launched.

Our minority citizens have worked hard to make our country what it is today and they deserve to share in the joys and benefits of owning their own home. We in the public sector must lead the way and do everything we can to make that happen. Stopping abusive predatory lending is a major step in the right direction.