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CRL to Feds: Don't Mandate Large Home Down Payments

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Low Down Payment Loans Seen as Key to Housing and Economic Recovery

By Charlene Crowell, NNPA Columnist –

As Congress and the White House continue to deliberate how best to rescue the nation’s ailing housing market, some in Washington are calling for a requirement that prospective homeowners make higher down payments in the range of 10-20 percent.

Yet according to the Center for Responsible Lending (CRL), requiring proper underwriting and verification of income, rather than a high down payment, are the factors that ultimately determine the success of a home loan. In a recently-released issue brief CRL also notes that requiring such a high down payment would take 14 years for the typical American family to save enough money for a 20 percent down payment and additionally stop a 50-year practice of allowing low down payments. Additionally, it could possibly remove the current option of purchasing private mortgage insurance.

Drawing a clear difference between low down payments on mortgages and subprime mortgage loans, CRL also warns that limiting low down payment loans will close the gateway to homeownership and the opportunity for middle class families to build wealth. Among households earning $20,000-$50,000, those who own homes have 19 times the wealth of those who rent.

“Because of low down payment loans”, the brief advises, “millions of low-to-moderate income families became successful homeowners. Mortgages generally performed well, producing limited losses for lenders, investors and taxpayers, while expanding the middle class.”

Between 1990 and 2009, more than 27 million mortgages were made with low down payments. These loans did NOT carry the risky features found in subprime loans. Excluding FHA and VA loans, these loans represented 13 percent of total mortgage originations during this period. These types of loans also were achieved by proven industry practices that included fixed-rate loans or at least the same initial mortgage payment for seven years, income and asset documentation, property appraisals, a debt allowance of no more than 41 percent of annual income, and an assessment of a borrower’s ability to repay the loan.

By contrast, subprime loan terms with weak underwriting standards brought variable interest rates after the first two years of the loan and every six month thereafter. Additionally, subprime loans had little if any income documentation and did not evaluate a borrower’s ability to repay the loan, even while allowing debt as high as 80 percent of annual income. These and other contributing factors resulted in record default rates.

The call for full privatization of the housing market is also being criticized by a number of civil rights and progressive organizations that include: the NAACP, the National Council of LaRaza, PolicyLink, the National Urban League, the Kirwin Institute, and National People’s Action.

On February 11, these organizations and CRL issued a joint statement on reforming the U.S. housing market that said in part, “Full privatization would leave most Americans at the mercy of Wall Street and we know from experience the devastating results that would bring. . .True reform must eliminate the dual-track structure that traps qualified families in a fringe credit market and must build a more secure and accountable secondary market, preventing future crises -- like the one that helped bring our economy to its knees.”

The complete issue brief is available on the CRL web at: http://www.responsiblelending.org/mortgage-lending/policy-legislation/regulators/dont-mandate-large-down-payments.html

Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at: Charlene.crowell@responsiblelending.org.

Black-Owned Firms Reap Economic Boost

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By Sommer Brokaw, Special to the NNPA from The Charlotte Post –

The Central Intercollegiate Athletic Association basketball tournament attracts thousands of middle- to upper-class African Americans who will spend millions on Charlotte businesses, especially those that are Black-owned.

With $2 million in ticket sales, more than 140,000 fans likely to come not just for basketball, but entertainment, many hotel rooms booked, concerts, shows, celebrity guests, and numerous parties, the tournament is expected to be bigger than ever.

Marvin Wilson, owner of Wilson’s Travel Secrets, an upscale travel and entertainment agency, has seen growth in the wealthier crowd coming into town for the tournament. “Looking at private jets coming in I maybe did about two in the last year and a half, and this year I’ve already put together four,” he said.

He added that entertainers on tour abroad are coming to Charlotte for the tournament, and he’s worked with EZ-Tixx on 150 shows this year, up from about 30 when he started in 2008. Several fans that attend these shows have money to spend with some two-hour shows costing $150 per person.

Wilson has sold 200 hotel rooms in the downtown area with hotel rooms sometimes costing around $350 and activities attached to it bringing spending to around $600 a day.

“It’s very important because my whole genre is travel and entertainment,” he said. “It’s putting a big stamp on Charlotte itself, and the more we add to it the more it will be beneficial not only to the tournament, but to businesses as well.”

The CIAA draws alumni this year from its 13 member schools – 12 of them historically Black colleges – from Pennsylvania to North Carolina. Thousands of others with no ties to the schools or league will also be in Charlotte, which is contracted to host the tournament through 2014.

According to the Charlotte Regional Visitors Authority’s research, the tournament accounted for $24 million in direct spending last year, a total economic impact of more than $37 million in a one-week period in 2010. Anthony Lindsey, a board member, CRVA, and head of CIAA local organizing committee, said during a press conference that this economic impact is up from $15 million when Charlotte became the host city in 2006. He added that it has also had a tremendous impact on job creation with N.C. Employment Security Commission figures showing growth in the leisure and hospitality industry.

“The CIAA is really big for us,” said James Bazzelle, owner and executive chef of Mert’s Heart and Soul restaurant in Center City. “We have a lot of convention business, but this tournament really starts off our year because January tends to be really slow because the weather is bad. Before the beginning of spring, it really gives a boost for us.”

La’Wan Adams, a graduate of CIAA member Virginia State University and owner of La’Wan’s Soul Food restaurant, said the tournament is the highlight of the business year.

“Our business has been here for 10 years, but every year the CIAA has come through the city of Charlotte business is awesome, and we go a little further than normal by extending our hours to accommodate fans,” she said.

Juanita Walton, co-owner of Oasis Day Spa and graduate of Johnson C. Smith University, a CIAA school, said that they normally see more women coming in particularly for manicures and pedicures, and some come in for massages and facials with a spike during tournament week.

Walton said CIAA fans are mostly college graduates that break the negative stereotypes that a large number of Blacks at an event will create a ruckus.

She made a comparison to the wild spring break street festival in Atlanta that resulted in anger over traffic gridlock and sexual assaults on women.

“This isn’t Freaknik,” she said. “These are older people. These are people with money. This is the middle class of Black America coming to spend money here in Charlotte. It would be extremely missed whenever their contract is up. If they left, it would be felt.”

Walton said that even in tough economic times the tournament’s economic impact is beneficial not only for Charlotte in general, but especially Black businesses with fans seeking them out to support them. “When people come, they are very conscientious of ‘I want to go to Mert’s or I want to go to Oasis,’” she said.

Millicent McMillan, owner of All Texture Barber Salon, said that even though her business is located outside of the city center, the economic impact still has a ripple effect.

“I have some friends that have businesses uptown that might make a lot of money from the tournament,” she said. “They’re going to spend their money with us eventually.”

National HIV/AIDS Awareness Rally Held in New Orleans

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By Michael A. Radcliff, Special to the NNPA from the Louisiana Weekly –

If ever one needed their spirits lifted or simply a good laugh, one only needed a chance encounter with Londy.

Londy's side-splitting antics would have most folks crying for her to stop. The family comedienne, the class clown, her reputation for turning life's lemons into lemonade was legendary. She also loved kids… her kids, your kids, everybody's kids… a PTO board member, a volunteer crossing guard - Londy's dream job was to one day own a day care center. In the Spring of 2008, at the age of 36, Londy, a mother of three, died of AIDS.

"She's Left the Planet," her sister, award-winning poet, Nikki Napoleon pronounced, as she performed a heartfelt rendition of a love poem written in honor of her sister during the National HIV/AIDS Awareness rally through the Tremé neighborhood recently.

"Too many of us have already left the planet," echoed Michael Hickerson, a social worker, community activist, Family Research and Evaluation Specialist for Total Community Action and chief organizer of this year's event.

"Knowledge is power and education has always been our most effective weapon in the fight against HIV/AIDS," he went on to say.

Partnering with Crescent City Links, the National Coalition of 100 Black Women; Dean Beverly Favre and SUNO's School of Social Work faculty, staff and students, nearly 300 individuals, organizations and schools participated in the march keynoted by City Councilwoman Kristin Gisleson Palmer.

"A myriad of thanks," Mr. Hickerson went on to say, "go out to Sheriff Marlon Gusman's office, Mayor Mitch Landrieu's Office of Public Health, and so many others who dedicated their time and money to make this event a success."

So where do we stand in our fight against HIV/AIDS in 2011?

Over the course of the past quarter-century, nearly 25 million people have died from AIDS. HIV/AIDS causes debilitating illness and premature death in people during their prime years of life and has devastated families and communities.

According to the Global Health Council, "Through unprecedented global attention and intervention efforts, the rate of new HIV infections has slowed and prevalence rates have leveled off in many regions. However, despite the progress seen in some countries and regions, the total number of people living with HIV continues to rise."

Below are some sobering facts about the HIV/AIDS epidemic:

• In 2008, globally, about two million people died of AIDS, 33.4 million were living with HIV and 2.7 million people were newly infected with the virus. As of March 31, 2009, a cumulative total of 28,843 persons have been diagnosed with HIV/AIDS in Louisiana.

• HIV infections and AIDS deaths are unevenly distributed geographically and the nature of the epidemics vary by region. While epidemics are abating in some countries they are growing in others. In a recent study by UNICEF it is notable that "more than 90 percent of people with HIV are living in the developing world."

• The HIV/AIDS virus does not discriminate by age, race, gender, ethnicity, sexual orientation, or socioeconomic status - everyone is susceptible. However, certain groups are at particular risk of HIV, including men who have sex with men (MSM), injecting drug users (IDUs), and commercial sex workers or prostitutes.

• The impact of HIV/AIDS on women and girls (especially Africans and African Americans), has been particularly devastating. According to the World Health Organization (or WHO), women and girls now comprise 50 percent of those aged 15 and older living with HIV.

• HIV continues to disproportionately affect African Americans in Louisiana. In 2008, 72 percent of newly diagnosed HIV cases and 70 percent of newly diagnosed AIDS cases were among African Americans.

• The impact of HIV/AIDS on children and young people is a severe and growing problem. WHO goes on to say that, in 2008, 430,000 children under age 15 were infected with HIV and 280,000 died of AIDS. In Louisiana, in 2009 there were 308 cases of children under the age of 13 diagnosed with HIV/AIDS.

• In addition, globally, about 15 million children have lost one or both parents due to the disease.

Today there is hope. There are effective prevention and treatment interventions, as well as research efforts to develop new approaches, medications and vaccines. Consider that in 1993 the typical life expectancy for a symptomless person infected with HIV was less than seven years. The life expectancy of individuals with AIDS in 2011 has grown exponentially.

According to researcher Dr. Mark Stibich, "for people who have access to new medications for HIV, called 'highly active antiretroviral therapy' (or HAART), at age 20 - life expectancy has now increased to about 30 to 40 added years, if they can afford and take the HAART medication correctly." In other words, a 20-year-old individual diagnosed with AIDS today, who takes the proper medication, can now expect to live to be 50 or 60 years old - yet survival and quality of life are never synonymous.

Former African Union Leader Offers to Die as a Martyr

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Special to the NNPA from the Global Information Network –

Facing the almost inevitable dissolution of his 43 year regime, Muammar al-Gaddafi made what could be his last television address last week.

“I will not leave the country, and I will die as a martyr," Gaddafi, 68, said, blaming the week-old popular revolt on mercenaries, drug users and foreign influences.

Along with a growing movement against the Gaddafi family empire, defections were reported in the Libyan leader’s cabinet including “Gaddafi’s No. 2,” the interior minister, and Ambassador Ali Suleiman Aujali. "This regime is shaking, and this is the time to get rid of him," Aujali said on ABC's "Good Morning America." "The people are being kill[ed] in a brutal way. The people, they are without weapons, and the regime, they have all kind of weapons."

Resentment, ignited by revolts in Egypt and Tunisia, boiled over as Gaddafi positioned his son Saif al-Islam to take over his seat. Libyans lack civil liberties, are subjected to arbitrary arrest and detention, the confiscation of lands, and discrimination that singles out ethnic and tribal minorities. There is no constitution; Gaddafi’s “Green Book” is the basis for the political system. Political parties are banned as are free elections.

While unpopular at home, Gaddafi was an influential force throughout Africa, spending vast sums of oil money on projects in Liberia, Niger, Chad, the Central African Republic, Somalia, Ethiopia, Sudan. He was the largest benefactor of the African Union which he chaired in 2009, and called for a “United States of Africa,” with its own common army, its own passport, and its own currency (to be named “the Afro”). “Without Gaddafi, the pan-African movement is dead,” said Laura Seay, a political scientist at Morehouse College in Atlanta who specializes in African politics.

“He was the only prominent voice driving that movement. He was keeping those ideas alive. There’s nobody else with the financial resources available.”

“For better or worse, he will leave a vacuum behind him on the African landscape,” observed Geoffrey York, writing for the British Globe and Mail.

U.S. Mobile Court Brings Justice to Congolese Women

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Special to the NNPA from the Global Information Network –

At a makeshift courtroom in the lakeside Congo village of Baraka, a military judge delivered justice last week for the women of South Kivu Province.

Lt. Col. Mutuare Daniel Kibibi received 20 years of hard time for inciting the mass rape of village women by his troops earlier this year. The somber faced Kibibi was taken away in handcuffs amidst hundreds of witnesses who gave the departing officer a piece of their mind.

Kibibi had turned his men on the village just after New Year’s in retaliation for the death of a soldier. His marauding troops smashed down doors and went house-to-house, pillaging, beating and raping for an entire night, from 7 p.m. until 6 a.m. the next day, witnesses said.

Activists hope this will be the first strike against soldier-rapists who act with impunity, unpunished for despicable crimes that are well-known to local leaders and the international community.

"The untouchable has been touched," Therese Kulungu, the lawyer representing the victims, told Reuters. Compensation was promised to the 49 women who testified and face "humiliation, degradation of their health, social stigmatization, risk of divorce, and possibility of HIV," presiding judge Col. Fredy Mukendi said.

The mobile court was paid for by George Soros' Open Society Initiative and aided by several other agencies, including the American Bar Association, Lawyers Without Borders and the U.N. Mission to Congo.

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