Posted on 01/12/2009 12:25:33 PM PST by NormsRevenge
WASHINGTON - Inland Rep. Joe Baca disputed criticism from a housing advocacy group and another lawmaker that he and the Congressional Hispanic Caucus added to the national housing crisis through overzealous support of programs that enabled unqualified buyers to purchase homes.
Baca, D-Rialto, said he has worked to increase responsible homeownership among minorities.
He rejected an advocacy group's assertion that the Hispanic caucus was warned about lenders targeting Latino buyers with risky subprime and adjustable rate loans.
Baca also denied any link between a $25,000 donation to his own foundation and his decision to co-sponsor housing legislation pushed by the group that made the contribution.
"Any accusations that I ... or other congressional and Hispanic leaders would advance a plan to increase homeownership at all costs, regardless of irresponsible lending practices, are reprehensible and completely untrue," Baca said Thursday.
Baca's remarks come in response to accounts first published by The Wall Street Journal connecting a portion of the mortgage meltdown to programs that were pushed by a coalition of mortgage industry professionals and Hispanic lawmakers to boost the number of Latino homeowners. The programs, critics said, enabled people to get home mortgages without good credit, down payments or reliable evidence they could repay the loans.
At the center of the dispute is Hogar, a housing initiative launched in 2003 by the Congressional Hispanic Caucus Institute, the nonprofit arm of the caucus. Baca served as chairman of both in 2007 and 2008.
Overseen by an advisory board that included Latino lawmakers, real-estate industry groups and lenders, Hogar -- the Spanish word for home -- sought to overcome the barriers facing Hispanic families wishing to buy homes.
Critics say they pushed too hard.
"Hogar pressured lenders into adopting standards which enabled people to purchase homes that they would not otherwise have been able to afford," said Rep. Ken Calvert, R-Corona. "As we now know, the result is a lot of people who were not qualified to buy a house are now facing foreclosure and our financial system has experienced a historic collapse."
Hispanic Caucus Institute officials said Hogar's role in the housing collapse has been overstated. Spokesman Scott Gunderson Rosa said the program merely provided fellowships for young Latino professionals, who conducted research aimed at closing the homeownership gap.
Hogar's proposals, however, included calls for "flexible loan underwriting" and "down payment assistance." Gunderson Rosa said the recommendations have been misinterpreted.
"Flexible and irresponsible do not go hand in hand," he said.
Latinos targeted
Baca lashed back at the suggestion that he aided the foreclosure crisis, providing a list of measures he has taken to remedy the troubled housing market. Baca last year introduced legislation that would allow struggling homeowners to swap out their subprime and adjustable-rate mortgages with government-backed, fixed-rate loans.
He also penned amendments to housing rescue legislation calling for better disclosure from lenders of the true costs involved with mortgage loans and greater in-person counseling for struggling borrowers. Both were adopted and the legislation has since become law.
Additionally Baca's staff has held multiple workshops in his district to educate constituents on their mortgage options.
Baca, whose term as caucus chairman expired at the end of last year, said Hogar's programs included an educational component to ensure potential buyers understood the ramifications of loan contracts.
But for many during the housing boom, the lure of homeownership was strong. And lenders were happy to oblige even unqualified buyers, since they could charge higher interest rates for risky loans, said Kathleen Day, spokeswoman for the Center For Responsible Lending, a nonprofit housing advocacy group focused on stopping predatory lending.
"They stopped assessing the buyer's ability to repay loans. They didn't care if the person could afford it," Day said. "Hispanics and blacks got a disproportionate share of these loans."
DISTRICT Hard Hit
While foreclosure figures aren't sorted by ethnicity, a Pew Hispanic Center poll released this week found that almost 1 in 10 Latino homeowners nationwide missed a mortgage payment in the past year or were unable to pay the full amount.
Baca's own district was hit hard. The largely Hispanic 43rd Congressional District, which includes San Bernardino, Rialto, Colton and Fontana, had the fourth-highest foreclosure rate among congressional districts nationwide, according to Hotpads.com, a real estate Web site that tracks foreclosed homes.
Baca said unscrupulous lenders targeted Latino buyers.
He scoffed at the notion that he or other lawmakers could be held responsible for promoting programs meant to help people buy homes.
"The cause was predatory lending and greed," he said. "They sucked them in to getting subprime loans, which should be illegal."
Day, of the Center for Responsible Lending, said the advocacy group's director of Latino Affairs approached the caucus and lawmakers throughout Congress to warn them about the large number of risky loans being awarded to Hispanic buyers. The woman, Aracely Panameno, told The Wall Street Journal that she was turned away.
"She never came to our caucus," Baca responded.
foundation Payment
Among Hogar's sponsors was AmeriDream, a charity that provided down-payment assistance to cash-strapped buyers.
Congress did away with that program last year, but subsequent legislation introduced by Rep. Al Green, D-Texas, would again allow AmeriDream and other groups to provide seller-financed loans. Baca became a co-sponsor of the bill on Sept. 16.
A month later, AmeriDream gave the nonprofit Joe Baca Foundation a check for $25,000.
AmeriDream President Ann Ashburn said the donation was made at the height of last fall's fire season and was spent on firefighting equipment delivered to the fire lines within days of the contribution
"AmeriDream was motivated to help the community after watching scenes of the wildfire fight on national television," she said.
Ashburn said her organization has a long history of helping communities in need.
Baca denied any impropriety.
"The idea that I added my name as a co-sponsor because of their contribution is absurd," Baca said.
While critical of Hogar, Calvert said he believed Baca and the other lawmakers pressing the initiatives were well-intentioned.
"They wanted people to be able to buy houses," he said. "But the road to hell is paved with good intentions."
There is every indication that the housing crisis has been caused by someone or someones with a D before their name.
Yeah, because YOU INSISTED they target latino borrowers. "Redlining", remember?
This would be FUNNY if it weren't going to cost us so dearly.
Baca and politicians like him deserve to go to jail for a long, long time.
These complete rewrites of history are astounding. We have a housing scandal, not a crisis. And the only predators involved live in Washington.
“...regardless of irresponsible lending practices” - Liberal Democrats can never, ever accept responsiblity for their own actions.
Until the State owns everything in a worker’s paradise of Communism, the Left will not rest in their blame game.
When government gets into any business, this is the result.
Latinos, mainly illegals, were given loans without citizenship, credit, employment or financial verification
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