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NAACP fights mortgage discrimination

Published July 3, 2008 12:00 am

On 'Day of Action,' group calls attention to anniversary of 1964 Civil rights Act
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

In an effort to combat unfair lending practices, the NAACP of Salt Lake City joined in a national "Day of Action" against mortgage discrimination Wednesday, the 44th anniversary of the signing of the 1964 Civil Rights Act.

Through news conferences and events nationwide, the NAACP called attention to what it contends are systemic problems for African-Americans and Latinos with dreams of homeownership.

"Today, for many African-Americans in Salt Lake City, the American dream of homeownership remains elusive," Jeanetta Williams, president of the Salt Lake City branch of the NAACP, said during a press conference at the Utah State Bar Law and Justice Center.

The focus of the discussion was a class-action lawsuit filed nearly a year ago by the NAACP against 17 major lenders, including JPMorgan Chase and Co. and Washington Mutual Inc. The suit alleges that the lenders systematically offered substandard terms on loans to minority applicants with similar credit, income and qualifications as white applicants.

"These people were given bad loans with high interest rates and outrageous fees because of the color of their skin," Williams said.

But the lenders have moved to dismiss the lawsuit. Tom Kelly, a spokesman for JPMorgan Chase, said in a telephone interview that the claims lack merit.

"We believe that we price our homes fairly because we base the pricing on the borrowers' entire range of qualifications," he said.

Salt Lake City attorney Alain Balmanno, who represents the NAACP, counters that while lenders argue that their choices were based on financial qualifications, studies done by agencies such as the Federal Reserve Board have shown that even when income and credit risk are equal, African-Americans often receive shoddy terms on mortgages.

"If you account for the same down payment, the same income, the same credit scores, African-Americans one-third of the time are steered toward abusive terms," Balmanno said.

Though no individual plaintiffs have opted into the suit, Balmanno believes that if the NAACP prevails in court, it would encourage lenders to rethink their policies and compensate customers who have received unfair lending terms.

Williams and Balmanno also said a handful of complaints have been filed by Salt Lake City residents regarding discriminatory lending practices.

The claims will be investigated by the NAACP and possibly added to the suit as it progresses, they said.