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34 Clearinghouse Rev. 642 (2000-2001)
From Redlining to Reverse Redlining: A History of Obstacles for Minority Homeownership in America

handle is hein.journals/clear34 and id is 658 raw text is: From Redlining to Reverse Redlining: A History of Obstacles for Minority Homeownership in America By Ira Rheingold, Michael Fitzpatrick, and Al HofeldJr. In this article we place the present home mortgage credit crisis in a historical con- text, examine its causes, and explore pos- sible actions that legal services attorneys can take. In section I we address the growth of the mortgage industry in this century and the systematic discrimination that occurred with the support and encouragement of the federal govern- ment. In section II we address federal efforts to counteract the resulting racial segregation in the private housing market. In section III we explore the somewhat successful attempts of increasing minor- ity homeownership in the 1990s and explain how this success is being under- mined by the scourge of predatory lend- ing. In section IV we suggest different ways legal services attomeys can become actively involved in this issue, which con- tinues to threaten the limited wealth of our nation's low-income and minority communities. I. Discrimination in Mortgage Lending The mortgage loans available in the 1920s had terms far different from the mortgages of today.1 The normal down payment required to purchase a house was between one-third and one-half of the total pur- chase price. This steep requirement pre- vented many families from getting into the home market. The duration of the mort- gage loan rarely exceeded seven years, with three-to-five- year financing being the norm. The result of such short repayment terms was either very high monthly pay- ments or a balloon payment at the end of the loan that was far too high to be afford- able for most middle-class families. Be- cause of the structure of these mortgages, only those with access to significant capi- tal were able to become homeowners. At the same time, the idea of the single-fam- ily detached home had gained a foothold in the American culture and discourse. Inspired by the country homes of the wealthy and the subdivisions of the upper middle class, most Americans dreamed of owning their own homes.2 The relative wealth of the American worker, and home- ownership rates that were indeed much higher than in other countries, fed the hopeful belief that a home was within reach of most families.3 After the expansion of the housing market in the 1920s, its bottom fell out 1 KENNETH JACKSON, CRABGRASS FRONTIER: THE SUBURBANIZATION OF AMERICA 196-97 (1985). 2 Id. at 71-72. 3Id. at 128-34. CLEARINGHOUSE REVIEW I JANUARY-FEBRUARY 2001 Ira Rheingold is a supervisory attorney, and Michael Fitzpatrick and Al Hofeld Jr. are staff attor- neys, Legal Assistance Founda- tion of Metropolitan Chicago, 111 W Jackson Blvd., 3d Floor, Chicago, IL 60604; 312.341.1070; irhein@lafchica- go.org.

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