Local and regional members of the NAACP joined together Wednesday, July 2, on the organization's Day of Action outside the Washington Mutual Tower in downtown Seattle. They demanded change from several of the country's top mortgage lenders for their discriminatory policies toward African American borrowers.
The NAACP filed a class-action lawsuit last July in Los Angeles against 17 of the nation's largest lenders, including Washington Mutual, J.P. Morgan Chase & Co., and HSBC Finance Corp. It alleges that African American borrowers were charged higher rates on mortgage loans based solely on the color of their skin.
"This discrimination is systemic, pervasive, and a national issue within the industry," says Yusef K. Robb of Los Angeles, a spokesman for the law firm of Kabatek, Brown and Keller, which is co-lead counsel in the suit. "We had events in more than 20 cities including Baltimore, Chicago, St. Louis and New York and in each one we heard the same story." The purpose behind this Day of Action was to push lenders to do the right thing and make amends to the people they have victimized, he added.
Washington Mutual said it is committed to fair and responsible lending, according to a company statement issued at the event on Wednesday and quoted in the Seattle Post-Intelligencer. Decisions for loans are based on monetary considerations such as debt-to-income ratio, credit score and history, and other factors. "Race is absolutely not a factor in making determinations," the company said in the statement.
According to a 2007 report by the Federal Home Loan Mortgage Corp., minority borrowers pay higher annual percentage rates on mortgage loans than non-minorities with equal income and credit risk.
Oscar Eason, Jr., president of the NAACP chapter for Alaska, Oregon and Washington, said it is discrimination that is keeping communities and the next generation of young people from moving forward. "Owning a home means much more than not paying rent. Home ownership is the key to building the wealth that pays for college, supports retirement, and is reinvested in communities," he said in an NAACP press release.
"Making amends is just the beginning," said NAACP Interim General Counsel Angela Ciccolo in a press release. "This discrimination was nationwide and cut across income levels. We want to make sure African Americans are never victimized by the lending industry again."