Buyer beware: a new scam targets immigrants with English-only mortgage documents.(NEWS)

WITH THE SUBPRIME MORTGAGE and foreclosure crisis sweeping across the nation, the California State Assembly is considering a bill to protect immigrant first-time home-buyers who are aggressively targeted by unscrupulous mortgage brokers. Assembly Bill 512 would mandate that key portions of loan documents be translated into one of five languages--Chinese, Korean, Tagalog, Spanish or Vietnamese--for people who primarily negotiate their tending contracts in those languages.

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The bill would be a tool to combat a predatory lending scheme that exploits buyers' limited English abilities and knowledge of the U.S. mortgage market. In this bait-and-switch scam, consumers--usually first-generation immigrants who are totally reliant on their brokers--negotiate their mortgage agreements in their native language but are presented with documents in English. In the typical scenario, homebuyers are promised stable terms and affordable refinancing deals, but are sold expensive subprime mortgages instead. Athough California has laws requiring translations of business documents, mortgage brokers are exempt.

Data about the exact numbers of victims is scarce, yet stories of foreclosures abound. "On an anecdotal basis, at least a quarter to a third of the folks who contact our agency are reflective of this situation," explained Heidi Li, the former codirector of Oakland-based Housing and Economic Rights Advocates, Li added that the vast majority of consumers targeted are Latino immigrants.

While the situation is most dire in California, experts say that language-access abuses in the mortgage market have implications for the rest of the country and that other states will be affected. Immigrant and consumer rights advocates say that predatory lending and housing discrimination against immigrants cause a significant portion of the foreclosures. A report released by the National Council of La Raza in 2007 showed that across the country people of color have been disproportionately affected by the subprime crisis, "Forty percent ...