Ask anyone to define the “American Dream” and almost surely, the reply will be: “owning a home.”  And for good reason – a home is equal parts family sanctuary and financial cornerstone.  But for too many African-Americans, that part of the American Dream is still that – just a dream.  And the recent mortgage crisis has made matters worse.  But as we respond to today’s headlines, I urge you to not forget yesterday’s lessons.

Some basic numbers tell a familiar story: African-Americans own fewer homes than other Americans, and those homes generally have lower average value.   This is, in part, the difficult arithmetic of our history.  African-American communities have historically been poorer and more marginalized, meaning that securing competitive loans or even having access to major banks has been difficult.

Past is often prologue, and the housing market is no exception.  In recent years, African-American communities have been deeply exposed to subprime and other risky mortgage products.  Subprime and other mortgages  that are associated with high default rates  are often more common in predominantly African-American neighborhoods.  And, although determining who gets what loan, and on what terms, is a complicated affair, recent reports have suggested that, even when income and other traditional credit criteria are similar, African-American borrowers are likely to pay higher rates for riskier loans than other groups.

And so, when the mortgage market collapsed, African-American homeownership went with it.  Between 2004 and 2007 – the beginning of the mortgage meltdown – rates of African-American homeownership declined faster than for any other group.   And it might get worse still, as African-Americans are less and less likely to even apply for a mortgage – applications from African-American borrowers fell by more than a third from 2006 to 2007.

To top it all off, the crisis has brought with it new forms of exploitation, including mortgage fraud and other schemes targeting vulnerable homeowners.  Reports of mortgage fraud have risen steeply across the nation, as have criminal investigations into these crimes. In one common scenario that my office has increasingly seen in California, so-called “loss mitigation” companies promise to help distressed homeowners for an upfront fee that is sometimes in the thousands of dollars.  Once paid, these firms do little or nothing, allow the loan to fall further behind, and walk away when banks foreclose on the home.  For these fraudsters and others like them, African-American communities, where subprime and other high-priced or risky mortgages are more common, present major targets.

These crimes must not be tolerated.  We must act, and government at all levels is responding.  In May 2009, President Obama signed the Helping Families Save Their Homes Act into law, including a plan to provide free assistance to millions of distressed homeowners.   By December, more than 650,000 homeowners had lowered their monthly payments by securing a mortgage modification with help from the Administration’s Making Home Affordable program.   In California, authorities at the state and local levels are putting in place programs to crack down on mortgage fraud and support distressed

My office in San Francisco has established a new Mortgage and Investment Fraud Unit to target the middle men who play a central role in the fraud industry: the local lenders, real estate brokers, loan consultants and investment advisors who facilitate fraud against hundreds of people in our city.  As a district attorney, I can act – I am acting – to combat fraud and exploitation of distressed homeowners. As an elected official, I must – we all must – keep the lessons of history alive.

February is Black History Month, when we celebrate our struggle, our  achievements, our contributions to the world.  But it is also a time when we can recognize our challenges.  African-Americans own fewer homes with less value, and we often pay more to get them, and more to keep them.  Until we lay a stronger foundation for sustained, and sustainable, growth in African-American homeownership, our communities will remain dangerously exposed to the next crisis.  This must be our work.  We have been dreaming long enough.

Kamala D. Harris is the District Attorney for the City and County of San Francisco.

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