Saturday, Jul. 19, 2008

Ellie Wooten: Is the American Dream being redlined?

Open letter to Congressman Dennis Cardoza, D-Merced

Dear Congressman Cardoza:

For decades, homeownership has been the cornerstone of the American Dream. Families scrimp and save to get into the housing market and work hard to make the monthly payments. The home continues to be a major investment for Americans, and for most people it is the largest piece of equity they will have in their financial portfolio.

As you and I have discussed on several occasions, I am concerned about the possible resurgence of discriminating practices by mortgage companies that could shatter the dream for millions.

As you know, along with being mayor of Merced, I also work in the real estate industry. I am aware on a personal level of what happens in the mortgage field and how it affects families who are trying to own a home.

From our conversations on the subject, you know it is my belief that some lenders have stopped offering mortgages on properties in Merced County, along with Stanislaus County and San Joaquin County.

They are engaging in practices that prevent the sales of houses in those counties, even when they are properly valued by several appraisers.

I am afraid if this practice is in fact widespread, it could end up mirroring historical "redlining" practices, which segregated vast numbers of Americans from equal access to mortgages.

Merced continues to have one of the highest mortgage foreclosure rates in the nation, to a large extent due to many out-of-town speculators trying to capitalize on the opening of the UC Merced campus.

The effect has been to make all of the city's residents falsely appear to be fiscally irresponsible; however, these speculators and the resulting foreclosure rates should not influence lenders' evaluation of individual Merced citizens' ability to pay their mortgages.

Borrowers should be considered for a home loan based on their personal finances, not the city's foreclosure rate. Any kind of discriminatory lending practices will prevent the deserving folks of Merced from purchasing a home of their own.

I know you have been following the housing crisis closely, and the numerous foreclosure prevention workshops you have held have been crucial for homeowners in Merced.

I hope you will continue to be a leader on the issue and help us to enforce the laws that prevent lending discrimination in our communities.

In addition, I hope we can work together to investigate these potentially abusive practices and to take every action possible to address this troubling issue so that our residents can continue to pursue the American Dream of owning their own home.

We need to keep the door open to the American Dream for as many Merced residents as possible.

Wooten is mayor of Merced and a real estate agent.