My job (explained by the Daily Show)

I must thank Jon Stewart and Larry Wilmore, the Senior Black Correspondent, for explaining subprime loans. As Mr. Wilmore says "they are the menthol cigarettes of loans."

A part of my job is to work on state policies impacting housing, small business and asset development. And the foreclosure crisis raging through the United States is a prime (pardon the pun) example.

Now don't glaze over here (I see you over there thinking this doesn't concern me). All kidding aside, did you know:

• A Federal Reserve study found that 55 percent of blacks and 45 percent of Hispanics received home loans with rates exceeding Treasury securities by at least 3 percentage points; only 17 percent of whites received such loans.
• The Federal Reserve, in testimony last month before the subcommitee on Oversight and Investigations for the Congressional Committee on Financial Services noted a list of financial institutions they have referred to the Department of Justice (don't laugh) for discriminatory practices. For instance, one institution had two discriminatory policies - one that prohibited lending on Native American lands. The other policy restricted lending on row houses, which resulted in discrimination against African-Americans.

And don't assume these are folks, like in the parody above, who are refinancing their homes to buy motorcycles or buying homes that are too big for them. We are hearing some heartbreaking stories:

• a couple who didn't want to put their adult son in a nursing home after a devastating car accident. They refinanced their mortgage to pay for modification to accommodate his health care needs to keep him at home. Jobs were lost and the institution refused to renegotiate the terms of the loan. Until a large daily newspaper called about the family.
• family members going in on a home together assuming both will be employed.
• homeowners buying two- or three- family homes (e.g. double or triple deckers) assuming rental income will help with the mortgage.
• and the most insidious - homeowners who are fraudulently tricked into signing for a loan they can't afford. We have seen documentation of income numbers being changed without the signatory knowing and people being bullied at the signing to agree to different conditions.
  

Some of these are issues that only the federal government can address since the issues cross state lines. However, one legislative option in my state is forcing mortgage companies to be graded on the same type of "report card" that banks have dealt with for over 30 years. The Community Reinvestment Act (CRA) was an attempt to address racial discrimination by banks. It forced them to publicly acknowledge what type of products (including mortgage rates) are being made available across neighborhoods.

There was a time when you bought your house from a local realtor and got your mortgage from the local bank. The banker was often someone you saw at the grocery store. It was someone who knew your family. Now loans are "owned" by large companies that don't care if a disabled son will end up in a nursing home or that entire neighborhoods are collapsing because everyone was hit with rising interest rates.

This is an example of how bigger isn't necessarily better. Of how people with little understanding of financing or banks but want to own a home for their children to grow up in are being taken advantage of. Or of how mortgage lenders are intentionally engaging in documented discriminatory practices.

This is an example of how we need to pay attention to how big business and our government (remember it is OUR government) treat us.