Expanding homeownership or predatory lending?

From USA Today:

Subprime lenders’ big gifts helped lawmakers

The nation’s top subprime lenders, including New Century Financial (NEWC), which has filed for Chapter 11, have lavished generous donations on homeownership programs sponsored by black or Hispanic members of Congress.

The paid sponsorships give lenders an entree to lawmakers and their constituents. Along with New Century, backers include Countrywide Financial (CFC), which settled a New York fair-lending investigation in 2006 by agreeing to compensate black and Latino borrowers for improper loans and set up a $3 million consumer-education program.

Another is Ameriquest Mortgage, which in 2006 agreed to a $295 million settlement with state attorneys general who charged it with improper lending practices.

Minority homeownership rates rose in the past several years. But the Congressional Hispanic Caucus Institute and Congressional Black Caucus Foundation today face an imploding market as subprime mortgages — higher-priced loans to consumers with impaired or scanty credit — go bad at an escalating rate. Federal regulators are tightening up on the lenders. The non-profit groups, founded by lawmakers, run education and outreach programs.

Still, a key lawmaker and caucus officials say subprime lenders remain important options. About 50% of black and Hispanic borrowers used subprime loans in 2005, compared with 17% of whites.
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The minority organizations aren’t the only recipients of subprime lenders’ largess. The industry contributes to other non-profit housing groups and lawmakers.