Are These Lending PSAs On Target?

by Jeffrey Hogue
May 28th, 2008
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On May 19, 2008, the U.S. Department of Housing and Urban Development (“HUD”) announced it has launched a national public service announcement (PSA) campaign that will educate the public, especially minorities, about their rights under the lending provisions of the federal Fair Housing Act.

In short, the Fair Housing Acts makes it unlawful to discriminate in the sale, rental, and financing of a home on the basis of race, color, religion, sex, national origin, disability, and familial status. According to Ms. Kim Kendrick, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, “HUD studies confirm that African Americans and Hispanics trying to become homeowners are often given less information about loan terms, are quoted higher rates and fees, and are sometimes discouraged from applying for loans.”

The PSA conveys to the public that it is illegal to discriminate in lending because of someone’s race, color, national origin, religion, sex, familial status, or disability, and encourages prospective borrowers to call HUD if they believe they have been the victim of lending discrimination. Ms. Kendrick went on to comment, “[h]opefully, this compelling campaign will empower existing and prospective minority homeowners to report these incidents so that they can receive help.”

The campaign will air in both English and Spanish and includes radio PSAs and newspaper ads that illustrate the kinds of challenges many minority homebuyers face when they attempt to purchase a home. The campaign will also include a series of fair lending forums designed to inform faith-based organizations, housing professionals, and the general public about HUD resources and programs that can assist in eradicating unfair and discriminatory lending practices.

Overall, HUD’s campaign is a step in the right direction. Promoting and providing education to the masses will undoubtedly empower them with their future residential financing decisions. However, HUD’s PSA appears to suggest that the problems with the lending industry are based, in large part, on discrimination. If this is, in fact, the suggestion, then I would disagree. Although discrimination may be somewhat of a contributor, the root of the problems with the lending industry is plain and simple – greed. Regardless of discrimination, greed from the unscrupulous lenders and the mortgage brokers, coupled with a lack of sophistication from the borrowers, has caused the trouble in this industry. The industry will start to clean itself up as soon as active and aggressive efforts are taken to rid the industry of these unscrupulous parties.

That being said, the more information that can be provided to the public at large to promote greater transparency in a troubled industry, the better. Time will tell if PSAs from HUD and other organizations will promote a more honest and less problematic industry.

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Attorney Jeffrey L. Hogue is a partner at the San Diego law firm of Hogue & Belong. Mr. Hogue is also a founder of the Mortgage Accountability Association.

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