The lending business took it squarely on the chin last month when not one, not two, but three separate studies found that mortgage discrimination is alive and well and living all across America.

The reports painted a bleak picture, indeed. The entire industry has been working for years to end bias, but apparently to no avail. In fact, the investigations showed that minorities are facing more discrimination, not less.

A fourth study by Freddie Mac, a giant of the secondary mortgage market where local lenders go to replenish their supply of money by selling their loans to investors, took a little of the sting out of the three damning reports with the finding that financial distress disproportionately affect more minorities than whites.

The federally-chartered corporation found that African Americans and Hispanics tend to have more extended periods of unemployment than whites, are divorced or separated more frequently, have more legal or tax difficulties, and experience reduction in incomes more often.

All these could be reasons to deny credit or charge higher rates.

Nevertheless, none of this can be used an excuse for the finding by the Association of Community Organizations for Reform Now, or ACORN, that discrimination is not only not getting any better, its worsening. And not just in mortgages to buy homes but in refinancings, too. And not just in some jurisdictions but throughout the country as well.

The ACORN investigation was released at a Department of Housing and Urban Development news conference, along with a second report by the Urban Institute for HUD that found minorities are less likely than whites to obtain mortgage financing. And when they do, it also discovered, they tend to receive less money at terms that aren't as favorable.

HUD scheduled the event as part of its effort to beat back a cut in funding. Though the budget submitted by President Clinton called for an increase in funding for the Office of Fair Housing and Equal Opportunity to from $40 million in fiscal 1999 to $47 million for fiscal 2000, for example, the House has voted to reduce funding to $37 million.

But despite the theatrics, HUD Sec. Andrew Cuomo was obviously peeved. Calling the studies "shocking," he said discrimination is not jut alive, "it's flourishing."

And that was before a third study, this one by the National Training and Information Center, was released five days later that said the high interest rates and fees charged by so-called "predatory" lenders who operate in the unregulated sector of the mortgage business are pushing families in the greater Chicago area into foreclosure "at epidemic levels."

Subprime lenders are those who make home improvement, home equity and other types of mortgages to borrowers with poor credit who can't obtain loans from conventional sources.

They made more than 50,000 such loans in 1997, which was 15 times as many as in 1991, NTIC found.

But even more dramatic was the increase in foreclosures on these loans. In 1993, subprime lenders foreclosed on just 30 loans in the region, accounting for less than 2 percent of all foreclosures that year. But in 1998, they foreclosed on 1,417 loans, nearly 36 percent of that year's total.

"Subprime lending is the Wild West of the mortgage market right now," said Gale Cincotta, the outspoken executive director of NTIC, a Chicago-based national non-profit resource center for grassroots neighborhood organizations. "Unless we regulate the interest rates and fees these lenders can charge, more families are going to lose their homes and more communities in the city and suburbs will have abandoned buildings."

The organization found that subprime lenders, who are often called "predatory" lenders because of the rates and fees some charge, not only lead the market in foreclosures on high-rate loans, they also lead the way in "fast foreclosures" on loans less than four years old. Some lenders showed up on both lists.

In case you missed the ACORN and Urban Institute reports, they found that:

• Blacks were denied mortgages 217 percent more often than whites in 1998, up from 206 in 1997. Hispanics were rejected 183 percent as often, up from 169.
• Minority testers were less likely to receive information about loan products than their white counterparts. Loan officers also took less time with minorities than with whites and quoted higher rates.

Published: October 4, 1999

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.