Posted on January 13, 2009

Rep. Joe Baca Riled by Latino Lending Accusations

Ben Goad, Press-Enterprise (Riverside, California), January 11, 2009

Inland Rep. Joe Baca disputed criticism from a housing advocacy group and another lawmaker that he and the Congressional Hispanic Caucus added to the national housing crisis through overzealous support of programs that enabled unqualified buyers to purchase homes.

Baca, D-Rialto, said he has worked to increase responsible homeownership among minorities.

He rejected an advocacy group’s assertion that the Hispanic caucus was warned about lenders targeting Latino buyers with risky subprime and adjustable rate loans.

Baca also denied any link between a $25,000 donation to his own foundation and his decision to co-sponsor housing legislation pushed by the group that made the contribution.


Baca’s remarks come in response to accounts first published by The Wall Street Journal connecting a portion of the mortgage meltdown to programs that were pushed by a coalition of mortgage industry professionals and Hispanic lawmakers to boost the number of Latino homeowners. The programs, critics said, enabled people to get home mortgages without good credit, down payments or reliable evidence they could repay the loans.


Hispanic Caucus Institute officials said Hogar’s role in the housing collapse has been overstated. Spokesman Scott Gunderson Rosa said the program merely provided fellowships for young Latino professionals, who conducted research aimed at closing the homeownership gap.

Hogar’s proposals, however, included calls for “flexible loan underwriting” and “down payment assistance.” Gunderson Rosa said the recommendations have been misinterpreted.


Latinos targeted

Baca lashed back at the suggestion that he aided the foreclosure crisis, providing a list of measures he has taken to remedy the troubled housing market. {snip}


But for many during the housing boom, the lure of homeownership was strong. And lenders were happy to oblige even unqualified buyers, since they could charge higher interest rates for risky loans, said Kathleen Day, spokeswoman for the Center For Responsible Lending, a nonprofit housing advocacy group focused on stopping predatory lending.

“They stopped assessing the buyer’s ability to repay loans. They didn’t care if the person could afford it,” Day said. “Hispanics and blacks got a disproportionate share of these loans.”


While foreclosure figures aren’t sorted by ethnicity, a Pew Hispanic Center poll released this week found that almost 1 in 10 Latino homeowners nationwide missed a mortgage payment in the past year or were unable to pay the full amount.

Baca’s own district was hit hard. The largely Hispanic 43rd Congressional District, which includes San Bernardino, Rialto, Colton and Fontana, had the fourth-highest foreclosure rate among congressional districts nationwide, according to, a real estate Web site that tracks foreclosed homes.


[Baca] scoffed at the notion that he or other lawmakers could be held responsible for promoting programs meant to help people buy homes.


Among Hogar’s sponsors was AmeriDream, a charity that provided down-payment assistance to cash-strapped buyers.

Congress did away with that program last year, but subsequent legislation introduced by Rep. Al Green, D-Texas, would again allow AmeriDream and other groups to provide seller-financed loans. Baca became a co-sponsor of the bill on Sept. 16.

A month later, AmeriDream gave the nonprofit Joe Baca Foundation a check for $25,000.


[Editor’s Note: The Wall Street Journal piece referred to in the text can be read here.]