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More than one in five homeowners are "under water," or owe more money on their house than it is currently worth, according to a new study by Zillow.com, a real estate research service. Negative equity occurs when the value of a home drops below the value of the homeowner's mortgage. In the past year, average home prices fell 14.9 percent nationwide.

Although historically, negative equity will resolve over time, it can lead to foreclosure when homeowners need to sell or refinance a home in the first few years after a purchase, before they have built up significant ownership equity.

In recent years, many homeowners bought houses with adjustable rate mortgages (ARMs), which offer a low "teaser" interest rate -- and low payments -- for a set period of time, often two to three years. At the end of the initial period, the mortgage then "adjusts" to the market interest rate, which can dramatically increase the monthly payment account.

Homebuyers who took out ARMs during the 2000s were assured by lenders and mortgage brokers that they would be able to sell or refinance their homes before the interest rate was scheduled to adjust, avoiding the increase in monthly payment. However, when housing values dropped, many homeowners discovered they were not eligible to refinance their mortgages because they didn't have enough equity in the home.

More than 40 years after the passage of the Fair Housing Act, housing discrimination continues to be a problem, according to the National Fair Housing Alliance's (NFHA) annual report on fair housing enforcement (PDF).

The Fair Housing Act prohibits housing discrimination on the basis of race, color, national origin, religion, sex, familial status and disability. It covers the sale, rental, and financing of dwellings, as well as housing-related transactions such as advertisements and insurance.

Last year, 30,758 complaints of housing discrimination were filed, a nearly 14 percent increase from the previous year, and the highest number filed in a single year since the Department of Housing and Urban Development (HUD) started keeping track in 1990.  NFHA attributed the spike in the number of complaints to the deepening foreclosure crisis, as well as internet ads that violate fair housing laws.

However, the number of complaints filed doesn't reflect the enormity of the problem. HUD estimates that fewer than one percent of housing discrimination occurrences are actually reported.

In the report, NFHA makes recommendations for improving the enforcement of fair housing laws, such as establishing an independent fair housing enforcement agency, enhancing HUD's ability to process complaints more quickly, providing additional funding for private fair housing organizations, and pushing the Justice Department to prosecute more predatory lending cases.

The report comes on the heels of Fair Housing Month, which was established in April to celebrate the anniversary of the passage of the Fair Housing Act on April 11, 1968 and educate Americans about the importance of fair housing enforcement.

Today, the U.S. Supreme Court heard oral arguments in a case regarding whether states have the authority to enforce state fair lending laws against national banks and other financial institutions.

The case, Cuomo v. Clearing House Association, began in 2005 when the state of New York tried to investigate certain national banks operating in the state that it believed were charging minority borrowers higher interest rates than White borrowers.  Federal Reserve home mortgage data released that year showed that minority borrowers were given higher-interest mortgages at disproportionately higher rates than White borrowers.

Like his predecessor Elliot Spitzer, who initiated the investigation, New York Attorney General Andrew Cuomo wanted to determine whether banks and other lending institutions were complying with consumer and anti-discrimination laws.  The banks refused to turn over their records, arguing that only federal regulators have the power to make them disclose loan information.

However, many civil rights advocates believe that states should take greater initiative in regulating banks because the federal government isn't doing enough to prevent abuse within the mortgage industry. In their amicus, or friend-of-the-court, brief (PDF), the Center for Responsible Lending and AARP argued that "there is significant evidence that enforcement by state regulators has served an important role in protecting consumers against financial practices" and added that "consumers, communities and the economy would be ill-served by concentrating in one federal agency the authority to enforce [consumer protection laws]."  

The District of Colombia and 49 other states also submitted amicus briefs in support of the state of New York.

Five hundred protesters forced a lockdown of the American Bankers Association (ABA) offices today.

The protesters, from community organizing group called National People's Action, are upset with the ABA for lobbying against the Helping Families Save Their Homes in Bankruptcy Act, a bill that will help struggling homeowners keep their homes by giving bankruptcy judges the authority to rework home mortgages on family homes to an affordable value.

Currently, bankruptcy judges are permitted to modify mortgages on second homes and most other debts, but not mortgages on primary homes.

The bill passed the House of Representatives on March 5 and is currently pending in the Senate.

The National Center on Family Homelessness released a report today that found that 1.5 million children in the U.S. experienced homelessness at least once in a given year.

The report, which analyzes data from 2005 and 2006, also examines the impact of homelessness on children's education and health. Typically, homeless children lead extremely difficult lives because they do not have access to privacy or health care and often attend school infrequently.

The report recommends that local, state and federal governments take action in order to prevent and end child homelessness. For example, the report suggests that the federal government set aside a third of housing program funding specifically for homeless families and families who are at risk of homelessness. In addition, state interagency councils on homelessness handling homelessness should make family homelessness a priority.