By Alejandro Becerra

Over a year ago, the nation’s housing sector and economy nearly collapsed. Since then, the Administration and Congress have taken significant steps to avert a deeper recession, stabilize home prices, and ignite the nation’s economic recovery. Record-low interest rates, rock-bottom home prices and a large housing inventory put homeownership well within the reach of thousands of home buyers. A new wave of foreclosures, boarded-up homes and blighted communities, however, threatens to reverse recent economic gains and increased home sales.

The recent decline in home values has already cost American homeowners $4 trillion in equity. The high loss of jobs, heavy household debt, and low income growth among millions of Americans has stalled significant economic progress.  At the same time, reluctance to effectively help many troubled mortgage borrowers who are erroneously believed to have acted irresponsibly continues to hamper government efforts to fully resolve the housing crisis.  We won’t revitalize the housing sector successfully until we dispel the myths about what created this crisis.

Myth #1: The bulk of subprime loans were made to irresponsible borrowers who knew they could not afford the homes they bought.

This statement is substantially incorrect. The Wall Street Journal has reported that 55% or more of all borrowers who obtained subprime loans in recent years could have qualified for less expensive conventional loans. Some reports have also shown that minority borrowers were more likely to get risky and higher-cost loans even if many of them qualified for prime mortgages.

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Last month I had the privilege to offer testimony to a joint hearing of the Subcommittee on Housing and Community Opportunity and the Subcommittee on Oversight and Investigations on the ability of minority small businesses to gain access to government contracting opportunities in the areas of housing and financial services. Take a moment to check out the comments I offered to Subcommittee Chair Maxine Waters and others: http://tinyurl.com/2doyx6a

Historically, minority businesses have been on the outside of this process looking in, particularly as it applies to the complex federal government procurement process. Truth be told, most minority small businesses lack the expertise and human capital necessary to navigate this process. So we’ve stood by and watched as others have gotten the business. But the world of government contracts isn’t the only area we’ve missed out on; we’ve missed out on other business opportunities too.

Despite the fact that minority neighborhoods were broadly impacted in the foreclosure crisis, Hispanic-owned firm Read the rest of this entry »