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Comrie blasts bank tactics

By Ivan Pereira

City leaders and the NAACP gathered on City Hall's steps last week to speak out against the nation's largest banking and financial institutions for using discriminatory tactics to issue subprime loans to inner-city homeowners.

City Councilman Leroy Comrie (D-St. Albans) and city Comptroller William Thompson joined dozens of National Association for the Advancement of Colored People members on the steps July 3 as part of the organization's National Day of Action against discriminatory mortgage lending.

The NAACP filed a class action lawsuit in July 2007 against 17 financial institutions — including Washington Mutual, J.P. Morgan Chase & Co. and the now-defunct Bear Stearns Residential Mortgage Corp. — for deliberately issuing mortgages with high interest rates that balloon rapidly over time to black Americans.

“Many of our communities have had their spirits broken by foreclosures and face harsh economic consequences as a result,” Thompson said. “We stand together today to call for an end to the discrimination that has helped fuel this foreclosure crisis.”

The subprime crisis has hit the city the hardest in the last two years, according to the NAACP. In 2007, the city's foreclosure rate was one for every 448 households compared to the nationwide foreclosure rate of one for every 557 households, the group said.

The neighborhoods with the most cases in the state have been ones populated by minority residents, including Jamaica, Springfield Gardens and St. Albans.

“You can find three to four homes on one block alone undergoing foreclosure,” Comrie said. “Such scenarios have a devastating effect on the entire community and created a climate where families are under enormous stress.”

The councilman noted several studies that indicated that blacks were unfairly being targeted by banks. A 2008 study by United for a Fair Economy, a Boston-based economic awareness group, found that high-cost mortgages accounted for 55 percent of loans given to blacks, but only 17 percent to whites.

The study also said there has been an estimated $164 billion to $213 billion lost on subprime loans taken out by minority lenders during the past eight years.

“Despite the efforts of city and state legislators to deal with this crisis, the banking industry is still utilizing favorable federal laws to continue offering subprime loans. It is why I fully support the NAACP's lawsuit,” Comrie said.

For those who need help dealing with a subprime mortgage, call Neighborhood Housing Services at 212-519-2500.

Reach reporter Ivan Pereira by e-mail at [email protected] or by phone at 718-229-0300, Ext. 146.