How to Avoid Discrimination When Trying to Buy a House after Foreclosure

How to Avoid Discrimination When Trying to Buy a House after Foreclosure

The sad truth about living in America is that a lot of banks discriminate against borrowers.

This is a completely new dimension to the foreclosure crisis and one that potential homeowners should learn how to recognize and deal with.

At the request of President Barack Obama, the Justice Department is only now starting to look into discrimination against ordinary folks who are trying to get a loan after short sale or buy a house after foreclosure.

In fact, there is now a whole new "anti-discrimination team" which has four lawyers and one economist. They are working out of the Justice Department to find which lenders are discriminating.

Here are some things you should know about discrimination when trying to buy a house after foreclosure:

REDLINING:

In the past, mortgage brokers and banks used to discriminate by doing something called redlining. This is when a bank refuses to give a loan to someone who is qualified, just because they live in a minority neighborhood.

REVERSE REDLINING:

Nowadays, banks do something called reverse redlining. This occurs when banks single out minority neighborhoods by attacking them with advertising campaigns that try to get people to buy terrible loans with extremely high interest rates, in order to trick them into signing.

Then the banks foreclose on their victims, steal their money, take the house back and stop them from ever

trying to buy a house after foreclosure or from acquiring a loan after short sale again.

BEST PRACTICES FOR MINORITY LENDING:

Even though this country has gone far in terms of civil rights, minority-lending practices are still a hot-button issue in Washington.

That means, Congress has not figured out a fair set of laws yet one camp thinks that banks should be forced to lend to minority neighborhoods to be fair. While the other camp thinks that by doing this, there would be more foreclosures, which would subsequently cause interest rates to rise.

FAIR LENDING LAW:

However, some leeway has been made in ways of fairer lending practices, as Obama has made it his 2010 agenda to create a fair-lending law.

DISCRIMINATORY CLAIMS:

If you have been a victim of discriminatory lending, you will have to file a complaint with the Department of Justice. This is the only government institution currently handling cases like this.

As of now, it is possible to receive money for filing a housing-discrimination claim, but money will only be awarded if the anti-discrimination department finds out that the lender was indeed being discriminatory.

You can also contact nonprofits, such as the center for responsible lending: http://www.responsiblelending.org/.

Don't bother wasting your money on a lawyer, though. Since the only way to prove a case such as this is through class action, which will have to be filed in federal court. A single lawyer will never be able to prove your case.

6. OPEN CASES:

There are currently 38 open cases of discriminatory lending in the US, with economists predicting more to come.

Most of the cases involve San Francisco-based Wells Fargo, which is considered the number one culprit of reverse redlining. There are dozens of Wells Fargo employees who went on the record saying that their bosses made them target minority neighborhoods. They even had morning meetings that included "practicing slang words" and watching "music videos" in order to "get closer to the culture".

For more information, sign up for a free information session at: http://www.HomeLoanAcademy.com/Register

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